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Identity theft concerns are focused on the security and necessity of the collection process. Collecting personal information just because you can is unsafe. Organizations can reduce privacy risks by not collecting unnecessary personal info. Once the data gets into the data life cycle pipeline, the cost of managing and destroying it escalates. The Federal Trade Commission estimates that as many as 9 million people have their identities stolen every year. According to the Privacy Rights Clearinghouse, more than 200 million instances of data breaches have occurred since the beginning of 2005, and they show no signs of letting up. In the first quarter of 2008 alone, more than 85 million incidents were reported. The causes of data breaches run the gamut: Hackers get unencrypted, transmitted data and data at rest; laptops are stolen or lost; storage Relevant Products/Services devices are lost by third-party shipping companies; flash drives or PDAs are left lying around; Social Security numbers are accidentally printed on envelopes; or data is found on discarded computers. This article examines the organizational risks to CPAs and their clients or corporate employers of improperly managed data throughout the data life cycle. It also discusses best data management practices and proper procedures for responding to a data breach. Data breaches, whatever the cause, are costly. According to a study by the Ponemon Institute, the average cost of a data breach in 2007 was $6.3 million. The average cost to an organization per record compromised is about $197, which is typically spent on phone calls for customer notification, providing free credit monitoring, discounts on membership fees, or discounts on merchandise to make up for the security Relevant Products/Services breach. Some organizations also experience an increase in customer turnover. The organization typically spends additional money in data protection Relevant Products/Services enhancements. Companies sanctioned by

Last month, the digital advertising industry's use of behaviorally targeted advertising gained a reprieve of sorts when the Federal Trade Commission issued a final report confirming its earlier support of self-regulation. But some commission members remained concerned about ads that are shown to Web users based on their previous online activities, and in particular the possibility of violations of online privacy. Some form of legal restrictions may be imposed on the industry, the FTC indicated, if the online ad industry isn't up to the task of regulating itself. "Privacy is definitely the biggest concern today," said Joe Apprendi, CEO of Collective Media, an online advertising network based in New York. "There has been the concern that through such approaches as deep-packet technology, companies can leverage information through subscriber-based providers to marry anonymous behavioral segment data and identify real people. "The fact is, online advertising is subject to a higher standard that offline direct marketing tactics," Apprendi said. The FTC report, "Self-Regulatory Principles for Online Behavioral Advertising," continues to advocate voluntary industry self-regulation, in keeping with its principles governing online behavioral advertising issued at the end of 2007, despite the urgings of consumer advocacy groups that it impose rules regulating online advertising. The commission's new guidelines are based on four principles: * Transparency and consumer control. The commission advises that Web sites that collect data for behavioral advertising provide "a clear, concise, consumer-friendly and prominent statement" that the data are being collected to provide ads tailored to the user's interests and that the user has an easy and obvious way to choose whether to allow this. * Security for data retention. Companies that collect data for behavioral advertising should provide "reasonable" protection of that information and reta

Another report on Sears getting slapped on the wrist for questionable data collection. Gee, why don't businesses take information law seriously? Maybe because it is more profitable to ignore it and pay a small fine? Not impressed by Obama's enforcement of privacy law.

Sears today agreed to settle Federal Trade Commission charges that it failed to disclose the depth of consumers' personal information it collected via a downloadable software application. The settlement calls for Sears to stop collecting data from the consumers who downloaded the software and to destroy all data it had previously collected. If Sears advertises or disseminates any tracking software in the future, it must clearly and prominently disclose the types of data the software will monitor, record, or transmit, the FTC stated. Sears must also disclose whether any of the data will be used by a third party, the FTC said.

Better to settle with the FTC than get your company's reputation as consumer-friendly (deserved or not) dragged through the court of public opinion.

Sears Holdings has agreed to settle allegations it collected personal data from customers without adequate disclosures, the Federal Trade Commission said on Thursday. The FTC had accused Sears Holdings, created in 2005 with the merger of Sears and Kmart, of paying online customers $10 to allow the company to track their online browsing. But the FTC said Sears also collected information on non-Sears sites, such as online bank statements, drug prescription records and emails. "The software would also track some computer activities that were not related to the Internet," the FTC said in a statement. Sears did disclose all it would monitor in a lengthy user license agreement, but the FTC argued it was not enough. "The complaint charges that Sears' failure to adequately disclose the scope of the tracking software's data collection was deceptive and violates the FTC Act," the FTC said in a statement. Sears did not immediately reply to two telephone calls and one email seeking a comment. Under the settlement, Sears is required to destroy the data collected and make future disclosures more prominent.

Google, Microsoft, Yahoo support self-regulation in the UK AOL, Google, Microsoft, NebuAd, Phorm, and Yahoo promise to behave. All of these companies - along with a few others - have volunteered to honor the Internet Advertising Bureau's just-announced set of Good Practice Principles. So on to the guts of the agreement. First, companies are supposed to tell users whenever they're collecting data for the sake of behavioral advertising. They're also expected to make sure users understand what the procedure entails. Then comes the key part: users should get the chance to opt out of the collection process. Ad companies are probably hoping that users will either be too lazy to take action or will actually prefer better-targeted ads. If so, the companies will continue to make money and improve their public image. But since privacy advocates may still complain that data collection isn't an opt-in matter, the issue isn't likely to go away. Mark Howe, the country sales director of Google UK, sidestepped the mess, simply stating, "Google believes in two core principles of transparency and choice when it comes to user privacy. That is why we are supportive of these new, self-regulatory principles for online advertising which will enable consumers to increase their understanding of their web surfing options." IAB described the Principles as "the UK's first self-regulatory guidelines to set good practice for companies that collect and use data for online behavioural advertising purposes." The Principles have been approved by the Information Commissioner's Office, which reports directly to Parliament.

As the impact of digital advertising on consumer privacy comes under scrutiny, AT&T is taking a stance in support of stricter standards. Rep. Rick Boucher (D., Va.), chairman of the subcommittee, said in an interview Wednesday that a statute is needed to regulate how companies collect, share and use data on consumers' behavior in targeting online advertising. While ad targeting on the Web has been at the forefront of privacy advocates' concerns, worries are growing about other media, ranging from mobile phones to emerging TV technologies. To sell marketers targeted ads, technology and media companies collect data about customers, ranging from the Web sites they visit to the neighborhoods they live in to the TV shows they watch. Marketers often will pay a premium for this form of advertising because it allows them to show their ads to consumers who are likelier to buy their products or services. "Pitfalls arise because behavioral advertising in its current forms is largely invisible to consumers," says Dorothy Attwood, AT&T's senior vice president of public policy and chief privacy officer, in prepared testimony she is expected to deliver at the hearing of the House Subcommittee on Communications, Technology and the Internet. Her statement says consumers don't fully understand that their online activity is used to create detailed profiles of them. Internet and other media companies say the data they use to target ads are anonymous and can't be traced to individual consumers. AT&T plans to argue that consumers should have "full and complete" notice of what information is collected about them and how it is used and protected, and should have tools that let them determine whether their Web activities are being tracked. The company says it won't use consumer information for online behavioral advertising unless it first obtains consent from the consumers involved. AT&T's stance contrasts with the position taken by most big Internet companies and industry trade grou

Traditionally, we trust doctors with confidential information about our health in the knowledge that it�s in our own interests. Similarly, few patients object to the idea that such information may be used in some form for medical research. But what happens when this process is subject to scrutiny?How explicit does our consent have to be? Since the introduction of the Data Protection Act 1998 medical researchers have raised concerns over the increasing barriers they face to accessing patient data.These concerns have heightened amongst some researchers since the passing of the Human Tissue Act 2004 introduced in the wake of the Alder Hey and Bristol Royal Infirmary scandals. When scientific advances are unraveling the secrets of DNA and the decoding of the human genome has opened up substantial new research opportunities.Clinical scientists and epidemiologists argue that the requirements being placed upon them are disproportionate to the use they are making of either datasets or tissues samples and, besides, their work is in the public interest.At the heart of the debate lie key questions over trust and consent and how these can best be resolved.To complicate things, it is no longer just medical researchers, but also public health bureaucrats who are keen to have access to our data.Quasi-official bodies have been charged with persuading individuals to change their behaviour and lifestyles in connection with all manner of issues such as diet, exercise, smoking and alcohol consumption.Social Marketing � the borrowing of commercial marketing techniques in the pursuit of 'public goods' � is in vogue amongst public health officials. Empowered by advanced data collection and computing techniques, armed with the latest epidemiological research, and emboldened by a mission to change unhealthy behaviour, public health officials are keen to target their messages to specific 'market segments' in most need of advice.Are government researchers abusing patients' trust? Can an

Top House and Senate Democrats are working on legislation that would prevent online marketers from sharing Web-surfing information unless Internet users allowed them to. That's according to House Communications, Technology and the Internet Subcommittee chairman Rick Boucher (D.-Va.), who told Multichannel News that such a bill was in the works and was one of his top legislative priorities. The issue of online behavioral marketing has gained traction recently, spurred by privacy concerns and by media companies' need to find new ways for advertisers to reach aggregated audiences at a time of fragmented viewing and multiplying delivery platforms. Boucher's predecessor atop the committee, Rep. Edward Markey (D-Mass.), held a hearing last fall on the issue and helped quash a test by ad-tracking company NebuAd and cable operator Charter Communications. In an interview, Boucher said he was teaming with Reps. Cliff Stearns (R-Fla.), ranking member of his subcommittee, and Joe Barton (R-Texas), ranking full committee member, on a bill that would apply "across the board" to behavioral advertising and data collection by Web sites. "The goal would be to give the Internet user a sense that information about him that is collected by Web sites is well understood by the user, so he has an opportunity to know what is collected," Boucher said. "He would then have an opportunity to act in a way that prevents that Web site using that information to market him personally, and an even broader opportunity to prevent the transfer of that information about him to third parties." Boucher envisions a combination of opt-in and opt-out requirements. "Opt-in would apply where the information is conveyed to third parties," he said, while "opt out would apply where the Web site that collects the information is using that information directly to market the customers from whom it is collected." Center for Digital Democracy executive director Jeff Chester was please

It's never been easier to get information on the run. Smart devices such as the G1 and Apple iPhone let you put the Internet in your pocket and go - down the block or across the country. But this convenience could cost plenty in lost privacy, consumer advocates and tech analysts say. Once data have been collected and warehoused, you lose control of it forever. "The Big Brother aspect of it is troubling," says Rep. Edward Markey, D-Mass., former chairman of the powerful House Subcommittee on Telecommunications and the Internet. Mobile consumers are especially vulnerable, Markey says. Unlike PCs, cellphones tend to be used by one person exclusively. The information they telegraph - on Web browsing, lifestyle and more - tends to be "highly personalized." That's the main reason mobile data are so prized: The information is incredibly accurate. It's also why Markey and other privacy advocates say the debate about online privacy will become even more intense as advertising migrates to the mobile Web. Mobile advertising is still relatively new - G1 users, for now, get ads only through search results, for instance - but it's clearly a hot spot. The market is expected to reach $2.2 billion by 2012, from about $800 million now, according to JupiterResearch. Ultimately, it could surpass the traditional Web, now a $20 billion ad market. Yahoo, Microsoft and other ad-supported search engines collect information as Google does. But the sheer size and scope of Google's data-mining operation - the Web giant performs more than 80% of all desktop searches worldwide - makes it a uniquely pervasive presence, says Chester. Google and Yahoo, the two biggest players in search advertising, say their self-imposed privacy policies are sufficient to protect consumers, noting that they do not collect or store information in a way that can be directly tracked to an individual. Peter Fleischer, global privacy counsel for Google, says Google tries to make privacy language as

Internet companies came under fire on Capitol Hill on Thursday, with lawmakers questioning how well the companies protect information that they collect online about consumers for advertising purposes. "I think it's a big deal if someone tracks where you go and what you look at without your personal approval. We wouldn't like that in the non-Internet world and I personally don't like it in the Internet world," said Rep. Joe Barton (R., Texas). Lawmakers in the House are drafting Internet-privacy legislation designed to provide consumers more information about what is being collected online and to give them greater control about how that data can be used. It could also set rules for how consumers could prevent their personal data from being shared with advertisers. "Consumers are entitled to some baseline protections in the online space," said Rep. Rick Boucher (D., Va.) chairman of the House Internet subcommittee.

The advertiser's dream of sending a particular commercial to a specific consumer is one step closer to reality as Cablevision Systems plans to announce the largest project yet using targeted advertising on television. Beginning with 500,000 homes in Brooklyn, the Bronx and some New Jersey areas, Cablevision will use its targeting technology to route ads to specific households based on data about income, ethnicity, gender or whether the homeowner has children or pets. The technology requires no hardware or installation in a subscriber's home, so viewers may not realize they are seeing ads different from a neighbor's. But during the same show, a 50-something male may see an ad for, say, high-end speakers from Best Buy, while his neighbors with children may see one for a Best Buy video game. "We have, as an industry, been talking about this since the beginning of time," said Matt Seiler, the global chief executive of the media firm Universal McCann, a part of the Interpublic Group. "Now we've got it in 500,000 households. This is real." The potential of customized ads worries some privacy advocates, despite the assurance of cable companies that they maintain anonymity about the households. "We don't have an objection to advertising that is targeted to demographics," said Marc Rotenberg, the executive director of the Electronic Privacy Information Center, a civil liberties group in Washington. But, he said, there is a need to show "that they can't be reverse-engineered to find the names of individuals that were watching particular shows." Cablevision says it segments its subscribers only by demographics, so that an advertiser can divide ads among various groups: General Motors, for example, could send an ad for a Cadillac Escalade to high-income houses, a Chevrolet to low-income houses, and one in Spanish to Hispanic consumers. Cablevision matches households to demographic data to divide its customers, using the data-collection compa

Facebook has gone a long way to protect the privacy of users on its own site. But what happens when users share their Facebook profiles and friend lists with other sites? Are social networks responsible for defending data its members decide to take elsewhere? Those questions have taken on added urgency following the introduction of tools by leading social networks, including Facebook and News Corp.'s (NWS) MySpace, that let users interact with their friends on partner sites. Facebook Connect, for example, lets a user instantly share a movie rating on Netflix (NFLX) with all or some of his or her pals on Facebook. Privacy advocates warn that these services pose a whole new set of concerns about how user data are collected and shared among sites on the Web. Using these open-networking tools, thousands of companies can unearth a trove of new data about a visitor-age, gender, location, interests, and even what a person looks like. "I'm wondering if people really understand when they're using Facebook Connect that other sites get access to their whole user profile and social graph," says Pam Dixon, executive director of the World Privacy Forum. Announced last July, Facebook Connect has already signed up more than 8,000 partner sites, many of which plan to use data collected on Facebook members for their own purposes. Joost, a video-viewing site that integrated with Facebook Connect in December, checks the ages of viewers entered on their Facebook profiles to give its own content partners-CBS (CBS), for example-a better idea of which Joost users are watching CBS programming. Digg.com will let users display their Facebook profile photos alongside comments they make on the social news-sharing site.

"Lora Bentley spoke with Anzen analysts Megan Brister and Jordan Prokopy via e-mail regarding behavioral advertising - what companies are doing, what regulators want to do and what we, as advertising consumers, need to know. With their coworker Miyo Yamashita, the analysts recently wrote a guest opinion for IT Business Edge. Bentley: Why are so many concerned about privacy when it comes to behavioral advertising? What is it about the Internet that convinces consumers that information they share there is not being used? Brister and Prokopy: Most concerns stem from the lack of transparency around data disclosure practices. While consumers may value a Web site's product and service offerings, they are generally unaware that businesses share their information with an extensive group of other businesses in order to deliver targeted advertising. This group includes news Web sites, advertising networks, profiling services, and Web analytics providers, to name a few. As Pamela Jones Harbour, a Commissioner at the Federal Trade Commission (FTC), discussed at the FTC Roundtable earlier this week, there is an asymmetry between consumer perceptions and business realities. Once consumers are informed of businesses' data handling practices, they will want to have more control over how businesses manage their information. As we discuss in our article, some businesses engaged in online behavioral advertising have been slow to adopt transparent consumer data management policies. This is a concern particularly for vulnerable groups, such as minors or non-English speaking consumers, because they may not understand legally written policies. Consumer advocacy groups argue that without knowledge and control over the collection, use, and disclosure of data, Web sites may misuse or expose sensitive data about consumers' health, lifestyles and finances."

"Google Inc. co-founder Sergey Brin Wednesday said the Internet giant "screwed up" by collecting personal data through wireless networks and promised new oversight as European officials pledged to open investigations of the data collection. Authorities in Germany, Spain and Italy said Wednesday they were investigating Google and its Street View service, which uses camera-equipped vehicles to take street images and mark the location of Wi-Fi networks. Mr. Brin, speaking the same day at Google's developer conference in San Francisco, said the company would put "more internal controls in place" to prevent such data captures in the future, including the hiring of outside help. "Trust is very important to us," Mr. Brin said. "We're going to do everything we can to preserve that trust.""

G apologizes. Again, better to ask forgiveness... If users remain silent & gvt doesn't prosecute, why comply?

Online targeted advertising and the collection of consumer data are the fuel of Internet commerce, not the major privacy problems described by some advocates and U.S. lawmakers, according to a new paper. "The use of such data permits firms to target their marketing messages to consumers' interests, pays for a wealth of content on the Internet, and helps protect consumers from a variety of online threats," said the paper, released Monday by the Technology Policy Institute (TPI), an antiregulation think tank. "It forms the basis for many of the business models that are fueling the growth of the Internet." Privacy groups want a "free lunch" online, with strong privacy controls that make it tougher for advertising to work online, the paper said. "Privacy advocates have provided little detail on the benefits of more privacy and have typically ignored the costs or trade-offs associated with increasing privacy," the paper said. Data collection delivers ads that people want and that advertising pays for a multitude of free services online, said the paper, co-authored by TPI President Thomas Lenard and Emory University law and economics professor Paul Rubin.

The debate on Internet privacy has begun in Congress. I had a chance to sit down recently with Representative Rick Boucher, the long-serving Virginia Democrat, who has just replaced Ed Markey, the Democrat from Massachusetts, as the chairman of the House Subcommittee looking after telecommunications, technology and the Internet. Mr. Boucher is widely regarded as one of the most technologically savvy members of Congress. As he ticked off his top priorities for his panel, most involved the pressing demands of telecommunications regulation. There is a law governing how local TV stations are carried on satellite broadcasters that needs to be renewed. There is the Universal Service Fund, which takes money from most telephone customers to pay for rural service to be improved. And there is the conversion to digital television and the investments in rural broadband to be supervised. But high on his list is a topic that is very much under his discretion: passing a bill to regulate the privacy of Internet users. "Internet users should be able to know what information is collected about them and have the opportunity to opt out," he said. While he hasn't written the bill yet, Mr. Boucher said that he, working with Representative Cliff Stearns, the Florida Republican who is the ranking minority member on the subcommittee, wants to require Web sites to disclose how they collect and use data, and give users the option to opt out of any data collection. That's not a big change from what happens now, at least on most big sites.

With identity theft on the upswing, Aram Langhans thought he was simply being prudent when he asked the Yakima Heart Center to remove his Social Security number from its files. "They had my insurance card and my driver's license. What else did they need?" said Langhans, a retired public school teacher insured by Group Health. Langhans said he was initially hooked up to a portable heart monitor that he was to wear for 24 hours, but the disagreement over his Social Security number prompted upper-level personnel to change their minds. He said moments after the device was attached, he was sent to a restroom to remove it and turned away. Shawnie Haas, administrator of the Heart Center, an independent outpatient group practice, declined to discuss the incident. But she said in an e-mail statement that the practice protects patients' privacy. "The Yakima Heart Center is careful to collect data pertinent to ensuring accuracy of our patient's medical record. Routine information collected for all patients includes name, address, date of birth, Social Security number, gender, and other specific information that helps us verify that individual's identity and insurance enrollment or coverage data. We are careful to maintain confidentiality of all patient information in our system." According to state and federal regulators, private insurance companies have moved away from using Social Security numbers for patient identification. But health-care providers in the Yakima Valley say they routinely collect them as "backup" in the event that patients' insurance doesn't pay the claim.

On September 12, 2009, Maine's Act to Prevent Predatory Marketing Practices Against Minors (the "Act") will take effect. The Act prohibits businesses from knowingly collecting or receiving a minor's health-related information or personal information for marketing purposes without first obtaining verifiable parental consent. Businesses are also prohibited from using any health-related information or personal information regarding a minor for the purpose of marketing a product or service to the minor. Pursuant to the Act, the use of information in such a manner is a predatory marketing practice, which may be sanctioned as an unfair trade practice. The law also allows individuals subject to unlawful data collection or predatory marketing practices to bring a private right of action against violators. For businesses, the implications of Maine's new data collection and marketing restrictions are far-reaching. The scope of the law covers both online and off-line marketing activities, and the broad definition of personal information includes a minor's name in combination with any information concerning the minor. In light of the Act's restrictive requirements and considerable scope, businesses would be well-advised to evaluate their current marketing practices and age verification mechanisms. The text of the law is available here.

Cable operators will sit in the hot seat Thursday as Congress reviews their plans to roll out targeted advertising amid fears that consumer privacy could be infringed if the companies were to track and record viewing habits. The House subcommittee on Communications, Technology and the Internet will hold a hearing that will look at new uses for digital set-top boxes, the devices that control channels and perform other tasks on the TV screen. Cable TV companies plan to use such boxes to collect data and direct ads more targeted to individual preferences. "We have recently called on Congress and the Federal Trade Commission to investigate cable's new interactive targeted TV ad system on both antitrust and privacy grounds," said Jeff Chester, executive director of the Center for Digital Democracy. He's concerned about Canoe Ventures, a consortium formed by the nation's six largest cable companies to oversee the rollout of targeted and interactive ads nationally. Chester worries that Canoe will track what consumers do in their homes. Currently, cable companies aim their ads based strictly on geography. Now, cable's goal is to take the Internet's success with targeted ads and transfer that to the TV medium. Thus, a household that watches a lot of Nickelodeon and the Disney Channel eventually could be targeted for theme parks promotions. This type of targeting is something broadcast TV can't do. For starters, Canoe plans to offer ads this summer that consider demographic factors such as age and income. Philadelphia-based Comcast Corp. and Cablevision Systems Corp. of Bethpage, N.Y., also have been testing or rolling out targeted ads outside the consortium. But cable operators are wary about being seen as trampling on consumer privacy and reiterate that they don't plan to target based on any personally identifiable information, such as someone's name and address. Canoe said it doesn't have plans this year to use set-top box data for ads. Instead, the first ads it pl

On November 1 and 2, 2007, the Federal Trade Commission will host a Town Hall entitled "Ehavioral Advertising: Tracking, Targeting, and Technology." The event will bring together consumer advocates, industry representatives, technology experts, and academics to address consumer protection issues raised by the practice of tracking consumers' activities online to target advertising - or "behavioral advertising." The Town Hall is a follow-on to a dialogue on behavioral advertising that emerged at a November 2006 FTC forum, "Tech-Ade," which examined the key technological and business developments that will shape consumers' core experiences in the coming ten years. In addition, several consumer privacy advocates, as well as the State of New York, recently sent letters to the FTC asking it to examine the effects of behavioral advertising on consumer privacy. The Town Hall will explore how the online advertising market, and specifically behavioral advertising, has changed in recent years, and what changes are anticipated over the next five years. Among other things, it will examine what types of consumer data are collected, how such data are used, what protections are provided for that data, and the costs and benefits of behavioral advertising to consumers. The Town Hall will also address what companies are disclosing to consumers and what consumers understand about the online collection of their information for use in advertising. In addition, the Town Hall will look at what regulatory and self-regulatory measures currently govern the practices related to online behavioral advertising, as well as anticipated changes in the behavioral advertising space in the future. The Commission invites interested parties to submit requests to be panelists and to recommend other topics for discussion. The requests should be submitted electronically to behavioraladvertising_requests@ftc.gov by September 14, 2007. The Commission asks interested parties to include a stat