Privacy, Information Security Continue as Top FTC Priorities

Lydia B. Parnes, Acting Director of the Federal Trade Commission’s Bureau of Consumer Protection, today told a gathering of the International Association of Privacy Professionals today in New Orleans, Louisiana, that privacy and security will continue to be a top priority in the FTC’s consumer protection program. The goal, Parnes said, is “striking the right balance between the many benefits the information based economy provides to consumers and the potential harm that can be caused by the misuse of consumers’ personal information.”

Parnes said that instituting the National Do Not Call Registry has proven to be a consumer protection triumph. “Fewer Americans are being interrupted by unwanted and intrusive telemarketing calls.” As of October 1, consumers have registered about 64.4 million telephone numbers with the registry, she said.

The FTC has been very aggressive in pursuing illegal spam, using a three-pronged approach that includes law enforcement, education, and research. The agency has filed 63 spam related cases against 164 individuals and companies. In the Phoenix Avatar case, the court ruled that “Liability is not limited to those who physically cause spam to be transmitted, but also extends to those who ‘procure the origination’ of offending spam.”

“The message is: even if you didn’t push the ‘send button’ – if you profit from illegal spam, you may be liable for violations of the CAN-SPAM Act,” Parnes said.

“One of the most serious consequences of the misuse of information is identity theft,” Parnes said. Implementation of the Fair and Accurate Credit Transactions Act of 2003, FACTA, provides important new tools to help consumers protect themselves against identity theft and to help them recover when they have been victimized. “Beginning on December 1st, the credit reporting agencies will implement a National Fraud Alert System that will allow consumers to place a fraud alert on their credit files if they have been victims of identity theft, she said.” In addition, “FACTA will require credit reporting agencies to stop reporting allegedly fraudulent account information when a consumer establishes that he or she has been the victim of identity theft.”

Parnes said new technology can offer great benefits but can also raise privacy concerns. She said that radio frequency identification, or RFID, which stores unique electronic product codes that can wirelessly transmit that code to a reader device is one such new technology. While beneficial applications include inventory management, pharmaceutical drug safety, health care and transportation technology like “easy pass” lanes, some people are concerned that the technology will enable the tracking of products into consumers’ homes. “Privacy advocates are concerned about what information is being collected, and how that information may be used, shared, and stored.” Parnes said that the FTC held a public workshop to examine the benefits and costs of RFID and will release a staff report summarizing the key issues raised at the workshop.

Peer-to-peer file sharing is another new technology with privacy implications, Parnes said. “File-sharing technology has numerous potential benefits for consumers. However consumers also face potential risks when downloading and using P2P file-sharing programs.” On December 15 and 16, the Commission will host a public workshop on P2P file-sharing to discuss future applications of the technology, risks to consumers, self-regulatory and technological efforts to protect consumers, and competition issues.

Parnes said the FTC recently filed its first spyware case. The court has entered a temporary restraining order to halt the surreptitious downloading, and scheduled a preliminary injunction hearing for November 9. She said there are more cases on the way.

“Spyware, like spam and the other privacy issues I have talked about today, are global challenges that require global solutions. For this reason, the FTC has undertaken a leadership role on international privacy and security issues. . . . To improve our ability to fight cross-border fraud – including spam and spyware – we have recommended that Congress pass the International Consumer Protection Act. This will give us necessary new tools to share and gather information and seek investigative assistance in cases where businesses defraud consumers across borders.”

“Privacy protection efforts will continue to occupy a central role in our consumer protection mission,” Parnes said.

Copies of the speech text are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.