Privacy groups question data use

A loophole that now allows federal agencies to skirt Privacy Act restrictions by using commercial data brokers should be closed, privacy expert James Dempsey said this week at a Senate Judiciary Committee hearing.

Dempsey, executive director of the Center for Democracy and Technology, said federal officials are not conducting privacy assessments, for example, on personal data bought from large data brokers such as ChoicePoint. Dempsey argued that Congress should change that with legislation.

Among witnesses at the April 13 hearing were officials from the FBI, Secret Service and Federal Trade Commission. Also speaking were executives from ChoicePoint, LexisNexis Group and Acxiom, among the nation's large data brokers. Each of those companies has had highly publicized security breaches of their databases.

Sen. Arlen Specter (R-Pa.), committee chairman, concluded the two-and-a-half-hour hearing on electronic identity theft by promising that the fast-growing data brokerage industry would not go unregulated. "I believe there will be some very firm regulations coming out of this," he said.

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