Editorial: Information Exchange

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Do you know what data you have socked away about your customers? Every purchase they've made in the past two years? Their ages? Height? Race? Religion? Occupation? Medical condition? Social Security number? Who else you've disclosed that information to? If you do business in California, you soon may have to be ready to divulge all that -- and more -- within 30 days of a consumer's request if S.B. 27 becomes law. And, according to the Direct Marketing Association, the bill's passage is highly likely.

"What underwear we buy and where we buy it and how much we paid for it. What Web sites we pay to visit with a credit card. Our income, our age, weight, the number of children we have," state Sen. Liz Figueroa, who introduced the "Shine the Light" bill, writes on her Web site. "Secret and purchase-specific direct marketing 'profiles' about our constituents are being sold every hour invisibly and routinely by the very companies with which they place their trust."

The DMA urged its members last week to speak out against S.B. 27 before it's too late. The bill passed the California Senate in May and is up for reconsideration in the state's Assembly today. The DMA is right in its argument that this could increase identity theft since there is no way to authenticate that the consumer making the request is the person who is the subject of the information. Identity theft is a big enough problem without any misguided legislation making it bigger. A new report from the Federal Trade Commission said 9.9 million people had their identities stolen in the past year and that it cost U.S. businesses $48 billion and consumers $5 billion in out-of-pocket expenses. Being a recent victim of identity theft, I'm still enjoying banging-my-head-against-the-wall calls to the credit reporting agencies to try to resolve my problem.

However, Figueroa is right in that companies shouldn't be secretive about how they use consumer data and why consumers should want access to the information. What's wrong with telling people that this exchange benefits them by lowering prices and allows for more targeted promotions? It's something the industry should be doing all the time. California has already made a new law requiring that consumers get written consent before banks, credit card companies and other financial-service businesses share their information. Besides being unneeded, this added burden is far too excessive.


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