ALERT/: Congress ready to undo state privacy laws

[Guest guest]

> Congress ready to undo state privacy laws

> CNBC

>

> Aggressive new protections around the country help victims of identity

> theft and limit business misuse of personal data. A bank- and

> insurer-supported bill would turn back the clock.

>

> By Liz Pulliam Weston

>

> Some states are making real progress in protecting their residentsprivacy.

> Some in Congress would like to change that.

> By Liz Pulliam Weston

>

> Some states are making real progress in protecting their residentsprivacy.

> Some in Congress would like to change that.

>

> The House this week is expected to pass a bill that could nullify many of

> the consumer protections recently passed by several states that are trying

> to help identity theft victims and limit how businesses use peoples

> financial data. (See " The top 10 states for protecting privacy.)

>

> The bill, HR 2622, updates the Fair Credit Reporting Act to include some

> sops for consumers, such as the right to a free annual credit report from

> each of the three credit bureaus. But the measure takes far more away by

> forbidding states from passing tougher privacy restrictions than the ones

> included in federal law.

>

> What's at stake

> Some of the state laws at risk include:

> * Opt inregulations. These require businesses to get

> consumerspermission before selling or sharing their data. California,

> Vermont, New Mexico and North Dakota have such laws, and other states are

> considering them. Although states could probably continue to ban selling

of

> data without permission, the House bill could nullify restrictions that

> prevent businesses from sharing information with affiliated companies.

> * Help for identity theft victims. Victims spent 297 million hours

last

> year trying to clean up their credit reports and resolve other problems

> related to the thefts, according to the Federal Trade Commission. Several

> states, including California, Connecticut, Illinois, Indiana, Louisiana,

> Nevada, Texas and Virginia recently passed laws to make the process

easier.

> * Credit freezing. These laws in California and Texas allow consumers

> to freezetheir credit so that identity thieves cant open accounts in their

> names. This solves the problem of lenders ignoring fraud alerts on

> victimscredit reports, a painfully common practice.

> Most of these state laws passed with overwhelming public support.

Lawmakers

> enacted Californias opt-inlaw, for example, after a huge petition drive

> threatened to put an even tougher measure on the ballot. Faced with almost

> certain defeat, financial institutions conceded to the compromise --

> knowing they could rely on their friends in the House of Representatives

to

> undo it later.

>

> In fact, banks, insurers and other financial institutions have lobbied

hard

> for HR 2622 and are expected to push for a similar bill in the Senate.

>

> Big Business vs. you

> These companies complain that the patchwork of state laws makes doing

> business more difficult and more expensive. But Americans are pretty sick

> of having their financial information swapped, sold and bartered. Theyre

> also tired of being victimized -- the Federal Trade Commission estimates

> nearly 30 million Americans were targets of identity thieves in the past

> five years, 10 million of them in the last year alone.

>

> This massive problem has been fueled by easy access to personal financial

> data and sloppy lending practices. (See How lenders help identity thieves

> steal from you.) Rather than make identity theft more difficult, these

> businesses simply write off fraud as a cost of doing business -- leaving

> consumers to shoulder the burden of trying to clean up their credit and

> reclaim their good names.

>

> If you want your state to have the option of better protecting your

privacy

> -- or if you live in a state thats already doing a better job than the

feds

> -- contact your U.S. representatives and let them know how you feel.

>

> Consumers Union, publisher of Consumer Reports magazine, has an e-mail

form

> to make this easier. (See the link at left under Related Sites.)

>

> http://moneycentral.msn.com/content/Banking/P60562.asp

>