03:39 PM EST on Tuesday, March 22, 2005

Frank the Moderator: Greeting everyone. Thanks for joining us today for our first business chat. Today at 2 p.m. John Kostrzewa will log on to answer questions about ID theft and privacy issues. Free feel to submit your questions early.

mcdave: John, is the state of RI doing anything about ID theft? Or are they asleep at the switch?
John Kostrzewa: Rhode Island Attorney General Lynch and his staff have been monitoring identity theft issues. Lynch recently sent out a report that said his Consumer Protection Unit had received 226 complaints of ID theft in 2004. In the wake of the ChoicePoint theft of social security numbers and other personal information, Lynch has proposed two bills in the General Assembly. One would require companies that have a security breach to notify all RI residents in their databases that their information may have been compromised. (There is no similar national law.) Secondly, Lynch has proposed a bill that would allow a victim to obtain an identity card from the AG's office to help them set up new financial accounts. What do you think? Is Lynch being aggressive enough?

Frank the Moderator: Hi John. Good column on Sunday.
Question: Can someone cross reference all my electronic information. Are companies like ChoicePoint and LexisNexis, able to build a profile of someone using different source. For instance can someone collect all my information from various sources like gas credit card, visa credit cards, netflix account, library account, tax returns, and build a compehensive account of my life.
John Kostrzewa: Thanks for commenting on my Sunday column. Yes, companies such as ChoicePoint and LexisNexis scour a wide variety of sources to build a profile of people. They look at credit reports, marriage licenses, court documents and any other public record to build as complete a profile as possible. The technology is so good these days that data collection companies are constantly searching public records files to keep building the profiles. The more complete the profile, the better chance they can sell the data to buyers.

sam atex: John: Why do we here in Rhode Island and the East have to wait until this summer to be able to get a free credit report. I know in Mass. you can get one every year without waiting. Thanks.
John Kostrzewa: Thanks for the question. My understanding is that the country was divided into several sections. Free credit reports will become available at various times during the years. My understanding is that the reports will be available for those in the Northeast after Labor Day. I'm surprised to hear that people in Massachusetts can get them now, but people in Rhode Island cannot. Do you know anything else about why that is? I'm curious to learn more.

Frank the Moderator: John -- What would an identity card from the AG's office entail. Would the cards be another easy way for someone to swipe one's personal information?
John Kostrzewa: The identity card proposed by the Attorney General in Rhode Island still has to be debated in the General Assembly so I'm not sure if it would become a public record that a data collection company such as ChoicePoint could then go out and collect. The same issues on the state level are evident on the federal level where lawmakers in Washington are wrestling with options for protecting people's personal information without creating a solution that is worse than the problem. It's a thorny issue and the debate will continue this Spring.

Frank the Moderator: John
Can someone truly create a life "off the grid". No credit cards, no mortgage, no bills?
John Kostrzewa: It would be tough to create a life "off the grid'' while still living in the world because we create public records for almost everything we do. There are birth records, death records, driver's license records, voting records etc. You could try to stay out of the financial world be using only cash, and never borrow a dime. But sooner or later your name's going to pop up on a deed or a mortgage and that's part of the public record that can be captured by the data collection companies.

oscar: John -- What do you really think that the off-sourcing of jobs will stop becuase of the problems of id theft. Is it so cost efficient for companies to go oversees that they will continue to do so, even with these privacy concerns?
John Kostrzewa: A company can save significant labor costs by shipping work overseas, whether it's manufacturing, service or professional work. The latest figures show that for basic service work, a company can do it for 20 percent to 30 percent of what it would cost in the United States. The identity theft issue does create concerns for U.S. companies that offshore work, because if violations occur, companies may lose customers and have second thoughts about whether sending the work offshore is worth it. One business model would be for U.S. companies to set up subsidiaries overseas that use overseas labor but have the same protections in place as the U.S. companies do. That may save the concern of turning over the work to a foreign-owned company with few controls over privacy issues. I think U.S. companies are thinking about these issues but the cost savings of sending the work overseas are so huge that it will not stop the work from going overseas.

sam atex: john: Just a note that I believe there is a state law in Mass. that allows consumers to get the free credit report. It is something the legislators did for the public. Thanx
John Kostrzewa : That's good information that I didn't know. I think the public in Rhode Island would think that getting free credit reports is a good idea. I wonder if a legislator in Rhode Island would also think it's a good idea and propose a similar law in Rhode Island. So far, I'm not aware of any such legislation on file at the State House.

Frank the Moderator: John -- tell us a little about what you and the business staff are working on to follow up on these issues.
John Kostrzewa: There is still a lot to do. Just in the last few days, there are new reports of identity theft from college databases. We may do more in that area about how local colleges are protecting their students information. Also, we will monitor the state and federal proposals for changes in the law to protect private information. And I'm going to follow up on that one piece of information I heard today about the state law in Massachusetts that allows for free credit reports for Massachusetts residents. Thanks for all your questions. I enjoyed the online chat and look forward to doing it again soon.

Frank the Moderator: Thank John. And thanks to the visitors who joined in. We'll have another business chat next Tuesday at 2 pm. Stay tuned for more details.

****

Editor's note: John Kostrzewa is interested in your thoughts and responses to this chat and to the issue of privacy and ID theft. Submit your thoughts to the chat tool or email John at jkostrze [@] projo.com