Consensus on how to notify data breach victims lacks

WASHINGTON — The data breach at Target Corp. that exposed millions of credit card numbers has focused attention on the patchwork of state consumer notification laws and renewed a push for a single national standard.

Most states have laws that require retailers to disclose data breaches, but the laws vary wildly. Consumers in one state might learn immediately that their personal information had been exposed, but that might not happen in another state, and notification requirements for businesses depend on where their customers are located. Attorney General Eric Holder has joined the call for a nationwide notification standard, but divisions persist, making a consensus questionable this year.

“We're stuck with the state-by-state approach unless some compromise gets done at the federal level,” said Peter Swire, a privacy expert at Georgia Tech and a former White House privacy official.

Despite general agreement on the value of a national standard, there are obstacles to a straightforward compromise:

• Consumer groups don't want to weaken protections in states with the strongest laws.

• Retailers want laws that are less burdensome to comply with and say too much notification could cause consumers to tune out the problem.

• Congress is looking at proposals for how any federal standard should be enforced and what the threshold should be before notification requirements kick in.

The issue gained fresh urgency as part of a larger security debate after data breaches involving retailers Neiman Marcus and Target. Target, the nation's second-largest retail discounter, has said 40 million credit and debit card accounts were exposed between Nov. 27 and Dec. 15.

Proposals now before Congress would require notification. But there are differences in what information the notification would provide, the threshold for notifying regulators and law enforcement, and the proposed enforcement. Some bills seek criminal penalties for deliberately concealing a breach; others do not.

Consumer groups fear that any national standard could turn out to be weaker than the strongest state laws, such as one in California that requires a business or state agency to notify any state resident whose data was improperly obtained.

Retailers say they support a federal notification standard, but one that would be triggered when sensitive material has been exposed — as opposed to, say, customers' shoe sizes — and when there's a risk that it will be used for theft or fraud.

Meanwhile, retailers remain at odds with financial institutions over how best to protect consumer data. Retailers say banks need to upgrade security technology on the credit cards they issue. Banks say retailers need to do more to enhance their own security.

“There's no agreement in the private sector among the major players about what their responsibilities are, and that makes it more difficult for us in the Congress to end up on the same page,” said Sen. Tom Carper, D-Del., chairman of the Senate Homeland Security and Governmental Affairs committee.