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Spam whets appetite for privacy
WASHINGTON (Las Vegas Review Journal) -- A recent spam e-mail sent to one of Sen. Richard Bryan's staff invited the aide to discover "secrets about your relatives, friends, enemies and everyone else."
For $25, an Iowa-based company called the Internet Spy Guide promised access to Social Security numbers, driving records, license plate numbers, unlisted phone numbers and criminal records. All of the sensitive information was located seconds away in a single, searchable Internet database.
For Bryan, D-Nev., such guides serve as a dramatic example of how vulnerable personal information can be. In a world where data can be stored digitally and disseminated rapidly for a price, people are losing control of their privacy, Bryan said.
"I can't emphasize this strongly enough, most people don't have any idea that this private information is being sold to third parties," Bryan said. "In fact, people think that information is confidential. They don't know that in effect the bank is going to let someone else know what their spending profile might be."
With six months left before Bryan retires from the Senate, privacy in the online and financial worlds has become a hallmark of his last days in office. He has offered two privacy bills this year, one aimed at the Internet, the other at financial institutions.
"I don't know about my legacy. It just came up on my committees," said Bryan, who sits on the three "money" committees -- banking, finance and commerce. "But I think it's fair to say, though, that as this privacy issue has now kind of caught on, I was among the first to recognize the potential threat to privacy and sounded the alarm."
Privacy on the wane?
In February, Bryan helped create the Congressional Privacy Caucus, a bipartisan group of representatives and senators concerned that privacy is on the wane.
"He's (Bryan) been one of the leaders. He's been ahead of the curve on a consistent basis," said Rep. Joe Barton, R-Tex., a member of the privacy caucus.
Bryan sponsored the only online privacy legislation ever enacted, the Children's Online Privacy Protection Act, in 1998. The law requires commercial Web sites to get parental permission before asking children personal questions.
But there are few other regulations on how the Internet industry and financial institutions collect and share information about their customers.
That could change, though. Privacy has become a watchword on Capitol Hill as polls indicate most Americans -- some put the number at 92 percent -- are concerned their privacy is at risk.
Driven by these figures and a flood of media reports, lawmakers are beginning to realize the market for personal information is large and spans both the online and offline worlds, Bryan said.
Banks share financial information with affiliate securities and credit and insurance companies. They also sell such data to telemarketers. Magazines share subscription lists. E-commerce companies are having trouble with "identity theft," the stealing of credit card numbers. Web sites can place files called "cookies" and "Web bugs" on browsers and sites to track a computer user's movements through cyberspace -- based on the movements, advertising agencies ascertain what the user's tastes are and deliver customized ads.
"This is enormous because no one knows just how much information has been shared," said David Horowitz, a consumer advocate in Los Angeles who has pushed for tighter privacy laws.
Bryan's Internet bill, one of a slew that has been offered by lawmakers, deals with online profiling, the practice of collecting information about Web users and storing it in detailed dossiers.
At issue is the use of "cookies," files from which Web sites and ad companies can glean information about a Web surfer's online purchases, subjects searched for and pages visited within a site.
Advertising agencies can use such information to send customized banner ads, which are usually nestled next to a site's primary content. For example, if someone visits an online bookstore and buys a couple of books on golf, the cookie will record those purchases. Then, the next time that person visits that site or an affiliate with the same ad agency, a banner ad for a discount golf trip could be displayed.
In theory, if the information from a cookie is merged with data such as a name and credit card number that an individual provides during an Internet purchase, companies have free rein to do whatever they want with the information, consumer advocates warn.
Most Web browsers allow individuals to disable cookies. But many popular Internet sites will deny access to browsers that do not accept cookies.
"So that's kind of a hard choice. OK, you can prevent cookies, but you can't get into your favorite Web site. What kind of choice is that?" Bryan said.
Knowledge of such tactics can scare off occasional Web users such as himself, said Bryan, who said he uses the Internet several times a week, but does not do business over the Web and has never made any purchases online. The bill reflects some of his personal qualms with how information is collected on the Internet.
He wants a law that lets consumers decide if information is collected about them. He would require Web sites to: clearly tell consumers what information is being collected and how that data will be used; have Internet users explicitly give their permission before any information is collected; not deny access to people who do not want information collected; and develop privacy policies in layman's terms.
Industry fights back
The Web advertising industry has opposed most regulatory efforts. Officials say they only keep records of innocuous information such as what sites a particular computer, not the individual user, visits. Most ad companies do not use information about finances, children, sexual orientation, politics or other sensitive information to create profiles.
Allowing Web surfers to deny ad agencies the right to collect data could hurt advertising industry sales, which totaled $4.6 billion in 1999, said Jules Polonetsky, chief privacy officer for Doubleclick, one of the largest Web advertising firms.
"The vast majority of Web sites are free of charge," Polonetsky told senators at a recent Commerce Committee hearing. "Why? Because of effective Internet advertising."
Financial institutions have also resisted Bryan's attempts to limit information sharing.
Last year, Bryan tried to pass a bill making banks, securities, and credit and insurance companies that have merged get a customer's approval before any information could be sold to third party marketers. It would also let consumers opt out of any information sharing between affiliates created by a merger.
"Banks fought it tenaciously," Bryan said. "And we were unsuccessful."
This year, the senator's financial privacy efforts have increased. He introduced the same information sharing bill, supported a similar proposal from President Clinton and has called on Nevada banks to develop their own privacy policies.
Most bank officials complain that requiring customers to give permission would be expensive, especially for small banks.
"This issue is a lot more complicated than I think a lot of people in Washington think," said Ed Yingling, executive vice president of the American Bankers Association. "It is a lot of work. Even the smallest banks do not have one map to look at with everybody's name. They have a lot of lists that they work off. They have a lot of info that they work off."
They also say the issue of privacy has been blown way out of proportion. Financial institutions have recently embarked on a campaign to pre-empt any legislation, proposing their own self-regulatory guidelines that emphasize the inherent trust that people place in their banks.
But Bryan said the real reason banks don't want regulation is simply because it is so profitable to sell information to marketers.
"Understand what this is all about. This is about money," Bryan said. "But most Americans are shocked that their banks and others are selling this information."
Ultimately, it may be hard to enact any legislation on privacy issues because the Internet and financial services industries have money behind them and power over today's economy, Bryan said.
"Both Democrats and Republicans are worshiping at the shrine of the high-tech industry, which they perceive as the new cash cow to finance politics," Bryan said. "Many believe we shouldn't do anything. I believe, however, that once the public finds out about this, they're going to be indignant."
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