Credit Monitoring

Credit Monitoring Would Be Required After Data Breach Under New Law

Aug. 23, 2010 – 2:52 PM PST

According to a report from the industry news website Helpnet Security, a new bill introduced by a pair of Democrats – Arkansas’ Mark Pryor and West Virginia’s John Rockefeller – earlier this month would require businesses and organizations that handle any amount of private consumer information to use “reasonable security policies and procedures.” Those personal details include contact information, financial data and Social Security numbers. In the event of a breach, the law would require the group to provide affected consumers with two years of credit monitoring, credit reports or “[another] service that enables consumers to detect the misuse of their personal information.”

In addition to the security measures, the law would require companies or organizations to occasionally assess their risk of a breach and correct any weaknesses, the report said. They would be required to notify consumers affected by a breach within 60 days of its discovery.

This proposed legislation comes just under a month after a bipartisan bill from Delaware Democrat Tom Carper and Utah Republican Robert Foster Bennett was introduced, the report said. That bill focused mainly on financial institutions, retailers and federal agencies that handle massive amounts of consumer data, but does not mandate that they provide any kind of credit monitoring service after a breach is discovered.

These two bills came about because while almost every state in the country has a law related to what organizations and businesses must do in the event of a data breach, they vary widely. The 46 states with such measures have 46 different laws, and this inconsistency can be troubling for consumers if a breach lets out information for those in several different states. By passing a national bill, any of the guesswork or uncertainty that would normally have been involved would be done away with.

Any consumer that may be worried about the security of their personal information could consider the benefits of a credit monitoring program. Doing so would help them to be more aware of any potential problems that may arise as the result of a data breach by alerting them whenever someone tries to use their identity to open a line of credit.

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