Vt. poised to act on data security

Vermont lawmakers are poised to take action to regulate data brokers in the coming months.

Data brokers — companies that collect and maintain consumers' personal information — have been in the spotlight after the credit report giant Equifax revealed that a security breach exposed the private information of millions of Americans.

However, lawmakers in Vermont began focusing on issues with the data brokerage industry last year, passing a law commissioning a study committee to examine what steps the state could take.

On the first day of the 2018 session, the House Commerce and Economic Development Committee reviewed the six recommendations in the study group's report.

Committee chair Bill Botzow, D-Bennington, said the issue is among his priorities for the year.

Attorney General TJ Donovan noted that the state is blazing the trail on data broker regulation. Though other states and the federal government have considered options, none has taken action yet, he said.

"Vermont would be first if we were successful in this endeavor," he said.

Approximately a third of the population of Vermont was affected by the Equifax breach, according to Donovan. The consumer assistance branch of his office received more than 700 calls about it, he told lawmakers Wednesday.

There are also concerns about scams by bad actors to take advantage of people, based on personal information readily available through brokers.

The recommendations include: prohibiting fees for freezing credit reports; creating new ways to go after those who intend to use data in wrongful ways; requiring data brokers to have security measures and public notification procedures in place; prohibiting sale of data about minors; and increasing public awareness about the industry and consumers' rights.

One of the first initiatives, Donovan and others said, should be to create a narrow definition of what comprises a data broker, without roping in companies ranging from brick-and-mortar stores to social media sites that may collect information.

Donovan said the challenge is to find a "balanced approach" that protects personal privacy without creating economic burdens on the industry.

The issues of digital consumer protection and data brokers have been under scrutiny in Congress, particularly in the wake of the Equifax breach. Several measures have been proposed — including by Sen. Patrick Leahy, D-Vt., but state officials said that they do not anticipate imminent action at the federal level.

Botzow said it is appropriate for states such as Vermont to explore regulation of data brokers.

"This is a place I think where the laboratory of the states makes sense," Botzow said.

He expects the Senate will consider legislation on related issues this session as well.


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