House watering down Calif. identify theft law

State law requiring notification for every breach would be scaled back under proposed national standard.
Written by ZDNet UK, Contributor

Congress is getting ready to pass national standards for rules on identity theft, a move that would gut California's strict rules, the San Francisco Chronicle reports.

The measure, which could come before the full House soon, follows a House vote early this month that would gut California's 20-year-old trendsetting food-safety labeling law. And three years ago, Congress passed legislation superceding the state's law preventing institutions from sharing customers' financial information with most other companies.

Industry, in case after case, has told Congress that it is unfair and hinders consumer protection to expect them to comply with 50 different state laws, especially when the U.S. market for services and products is one big market, not 50 separate ones.

But consumer advocates see a disturbing trend driven by industries' close ties to the majority Republicans in Congress, to whom big companies have given millions of dollars in campaign contributions.

 With the recent brouhaha over cellphone records being sold online, it's obvious that stricter not watered-down standards are what's needed. But major financial institutions don't want to see California's requirement - requiring consumers be alerted everytime their personal data is compromised - spread to more states.

"Privacy is the No. 1 concern of most Americans. I don't see how making life easier for would-be identity thieves, as Congress seems intent on doing, and setting the identity theft prevention efforts back five years does anything to help people protect their privacy," state Sen. Debra Bowen, D-Marina del Rey (Los Angeles County), said in a statement. She is lobbying California's congressional delegation to oppose the proposed federal standard.

Industry's claim is that 50 different standards would be too cumbersome for businesses to comply with. 


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