Gov. Timothy M. Kaine has proposed two new consumer-protection measures. One would require businesses and state agencies to inform consumers when their personal identification information has been improperly acquired, accessed or released to the public. The other would give Virginians the ability to freeze their credit reports until any identity theft or fraud issues are resolved. (See the Governor’s press release.)
Bacon’s bottom line: These seem like reasonable proposals to me. The burden of notifying consumers of security breaches is a trivial regulatory burden — especially in comparison to the havoc that the loss of personal identity data could inflict upon a victim’s personal finances. Prompt disclosure and prompt action can limit the damage.
To my way of thinking, these proposals do not constitute an expansion of the “nanny state.” Government has two legitimate roles in the realm of consumer protection: prevention and prosecution of fraud, and promotion of information transparency that help citizens make better informed consumer decisions. These measures would safeguard against an increasingly virulent type of fraud.