Senator Feinstein Unveils Comprehensive
Measure to Better Protect Americans’ Privacy
June 15, 2001

Washington, DC – U.S. Senator Dianne Feinstein (D-Calif.) last night introduced comprehensive legislation to combat the growing scourge of identity theft and other privacy abuses by setting a national standard for protection of personal information, including Social Security numbers, driver’s licenses and health and financial data.

“Every American has a fundamental right to privacy no matter how fast our technology changes and I believe we must increase protections for this basic right,” Senator Feinstein said. “This legislation will restore Americans’ control of their most sensitive personal information while at the same time protecting legitimate commerce.”

“This legislation sets up a clear, two-tiered system of protection for all personal information,” said Feinstein. “First, for the most sensitive personal information such as Social Security numbers, driver’s licenses, and financial and health data, companies must get an individual’s explicit permission prior to the sale of this information to third parties. This provision is also known as ‘opt-in.’ Secondly, for non-sensitive personal information such as addresses, companies must give individuals an opportunity to withhold their information if they so choose. This provision is also known as ‘opt-out.”

In addition, the legislation protects privacy without burdening commerce. Businesses will still be able to share Social Security numbers with the businesses for commercial purposes. For financial and non-sensitive information, businesses such as banks are permitted to share this information with their affiliates. Finally, for driver’s licenses and health data, the legislation expands the opt-in requirements of current law.

“Recent statistics on the growth of identity theft suggest we have no time to waste in protecting personal privacy,” said Feinstein. “The Federal Bureau of Investigation estimates 350,000 cases of identity theft occur each year, or one case every two minutes.”

Reports to the Social Security Administration of Social Security number misuse have increased from 7,868 in 1997 to 46,839 in 2000 -- an astonishing increase of over 500%. The Federal Trade Commission (FTC) has experienced a similar explosion of cases. If recent trends continue, reports of identity theft to the FTC will double from 2000 to 2001 – to over 60,000 cases. The FTC also reports that 17 percent of identity theft complaints originated in California, thereby making the state the nation’s leader in invasions of personal privacy.

The Privacy Act of 2001 protects the privacy of information regardless of the medium through which it is collected while other measures have tried to confine privacy legislation to the Internet. “These proposals unfairly discriminate against high technology,” said Feinstein. “Put simply, companies and other entities can misuse personal information from the mail or other off-line sources just as easily as with on-line sources. I believe that regardless of how this personal information is obtained, it should be protected.”

Summary of the Privacy Act of 2001

• Requires companies that intend to collect and sell or market a customer’s address, phone number, or other non-sensitive information, to give the customer an opportunity to opt-out of the sale if they so choose.

• Requires an individual’s opt-in, or explicit and affirmative consent prior to the sale, licensing, or renting of sensitive personal information such as Social Security Numbers, driver’s licenses and financial and health data.

Specifically, this provision of the legislation would:

• Restrict the purchase, sale, and display of Social Security numbers to the general public. For the first time, Federal, State, and local governments will have to redact Social Security Numbers on government records before these records are provided to the public and the numbers will no longer be permitted as the default driver’s license number. The bill does, however, permit the sale or purchase of Social Security Numbers to facilitate business-to-business transactions so long as businesses put appropriate safeguards in place and do not permit public access to the number.

• Close loopholes in the Driver’s Privacy Protection Act, most recently amended last year, so that a State Department of Motor Vehicles can no longer disclose the most sensitive information on a driver’s license – such as the driver’s identification number or physical characteristics – without the driver’s opt-in.