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GCN Home > July 3, 2000 issue

THE BELTWAY AND BEYOND

Privacy issues aren’t just for the private sector

Editor and writer H.L. Mencken said, “There are some politicians who, if their constituents were cannibals, would promise them missionaries for dinner.” Few politicians are quite that crass, but they do carefully watch what their constituents want.

Politicians follow poll results. They notice spikes when citizens are asked about privacy and computers. And so, we should expect political attention on the subject.

Senators such as Ron Wyden (D-Ore.), a friend to both high-tech industry leaders and consumer advocates, will help define the coming debate. The Clinton administration has proposed a bill to amend last year’s banking reform law and has identified as a critical issue the use of people’s financial data by private institutions.

The banking legislation passed last year lets customers choose not to have their data released. For example, if I provide my financial data to obtain a mortgage, that data could be made available to an insurance affiliate, which would send me product offers. Maybe I don’t want to receive such offers. The new legislation would give me a way of saying no to such data sharing.

The government needs to recognize that any such privacy rules can and should apply to it as well. Not all federal agencies act consistently on such concerns. Take the IRS, for example.

Some IRS bureaus win awards for their privacy policies. But some tax regulations are 25 years old, hopelessly outdated and reflect a two-faced attitude toward privacy.

The agency for instance permits taxpayers to share information with tax preparers to obtain, for example, instant loans against refunds. But tax preparers must get taxpayers’ written consent.

In an electronic transaction, written consent comes via a click-through screen. Some companies already take consents electronically, but the IRS, which regulates the use of such data, should make it clear that an online consent is the equivalent of a handwritten consent.

The IRS requires a separate handwritten consent form for each service offered by tax preparers or software companies that make tax programs. So if you want information on a mutual fund, you conceivably would have to sign a separate consent form in addition to the one you sign for insurance information.



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