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Roaming With...Federal Trade Commission's View on Consumer Privacy
By Joel Winston and Michael Atleson
Protecting Consumer Information
As news of the latest data breaches continues to break on a regular basis, the public’s attention has turned to the question of whether businesses (and government) are doing enough to protect the sensitive consumer information they collect, store, use, or transmit. Millions of consumers are victims of identity theft each year, and numerous surveys attest to the deep concerns consumers have about the privacy and security of their personal information against those who would steal their identities. Not surprisingly, these concerns are beginning to manifest themselves in consumers’ loss of confidence in electronic commerce and their reluctance to conduct transactions that they fear are not safe.
The rapid development of wireless technologies for using and transmitting data has created both opportunities and challenges. One particularly important challenge is how to manage the complex privacy and security issues these new technologies raise. Both the private and public sectors must address these issues to ensure that consumers are protected and consumer confidence is maintained.
Protecting the privacy and security of consumers’ personal information has been one of the highest priorities of the Federal Trade Commission, the nation’s consumer protection agency. In recognition of the importance of these issues, in late 2005, the commission created the Division of Privacy and Identity Protection, a new office within its Bureau of Consumer Protection, to oversee issues related to consumer privacy, data security, identity theft, and credit reporting.
Well before the new division was created, however, the commission began its pursuit of a strategy to better protect consumers from the unauthorized acquisition of their personal information. This strategy has been a multi-faceted one, combining education and guidance for businesses and consumers, regulatory actions, legislative proposals, and law enforcement against companies that failed to protect sensitive information.
Enforcement Efforts
The commission has taken several actions against companies and individuals that violated laws protecting consumer privacy. These laws include the Federal Trade Commission Act (“FTC Act”), which generally prohibits unfair and deceptive business practices; the Gramm-Leach-Bliley Act, which requires financial institutions to protect their customers’ data and disclose information-sharing practices to consumers; and the Fair Credit Reporting Act (“FCRA”), which, among other things, requires consumer reporting agencies to ensure that they provide consumer reports only to those who have a permissible purpose for them.
