States, feds go after online records brokers

By: - February 4, 2006 12:00 am

Alarmed by revelations that personal cell phone records are being pilfered and sold on the Internet, state and federal officials are rushing to update laws to protect consumer privacy and punish Web sites peddling the data.
Attorneys general in at least three states – Illinois, Missouri and Florida — have sued to block Web sites that sell the records, while state legislators from California to Maine are pushing bills that would expressly prohibit the practice. 
Congress and federal regulatory agencies have also taken an interest. A bipartisan team of U.S. senators introduced legislation Jan. 18 that would outlaw the sale and acquisition of the records. The Federal Communications Commission and Federal Trade Commission have endorsed the bill.
For now, however, uncertainty remains about whether a state-by-state fix or a federal solution to the problem will emerge.
The rush of legislative activity began after the Chicago Sun-Times reported on Jan. 5 that a number of Web sites sold cell phone records – including lists of numbers dialed, as well as their locations – for as little as . The only information required to obtain such records is the phone number from which the calls were placed, the newspaper reported.
The records are usually obtained in one of three ways: through “pretexting,” or impersonating customers; hacking into customer records online; or, in the case of wireless provider employees, releasing records without authorization, according to the Electronic Privacy Information Center, a public interest group that monitors the issue.
And while legislators introduce bills that close all loopholes and specifically target the sale and acquisition of cell phone records, telecommunications industry officials and attorneys general say the practice is already punishable under existing laws.
Illinois became the first state to sue an online records broker when Attorney General Lisa Madigan sued 1 st Source Information Specialists, Inc., on Jan. 20, a spokeswoman for Madigan’s office said. The Florida-based company operates several Web sites that sell cell phone records, according to a copy of the suit.
The attorneys general of Florida and Missouri quickly followed Madigan’s lead, filing suit on Jan. 24 and Jan. 30, respectively, against 1 st Source Information Specialists and, in Missouri’s case, one other records broker – First Data Solutions, Inc.
Meanwhile, several wireless providers, including T-Mobile, Verizon and Cingular, filed earlier lawsuits against records brokers, with Cingular winning an injunction against First Data Solutions and 1 st Source Information Specialists on Jan. 13.
“It is truly frightening to think that someone with a grudge and can find out how you live your life,” Madigan said in testimony before the House Energy and Commerce Committee Feb. 1.
During her testimony, Madigan suggested that state governments might be better suited to handling the problem than the federal government.
“[The] states many times bring new perspective to the legislative process and can be innovative in the approaches they devise to address problems confonting their citizens,” Madigan said. “I hope Congress will choose not to preempt any state legislation that is passed regarding this issue.”
No state legislation banning the sale and acquisition of cell phone records has passed, but lawmakers across the country are increasingly calling for action.
California has had a bill on the table since February 2005, and lawmakers in Illinois and Florida introduced bills just days after federal legislation was proposed in Washington. Legislators in Connecticut, Maine, Michigan and Minnesota have also said they will introduce bills.
Maine state Rep. John Brautigam, one of those legislators, said he is working with officials in Illinois and Michigan to ensure that the wording of the state bills is “as consistent as possible.” Brautigam, a Democrat, also said that new legislation – while perhaps not necessary to prosecute brokers – would make prosecution easier.
“With my legislation, you don’t have to prove how [brokers] got the records, and that’s sometimes tricky,” Brautigam said. “You’d have to go and prove that they did one of those illegal things as an enforcement matter in a court of law. I want to make the actual practice of selling this stuff just as illegal as the practice of selling a stolen car.”
In California, Democratic state Sen. Joe Simitian, who introduced the nation’s first bill banning the sale of cell phone records, said federal legislation could be more effective, but expressed skepticism at how quickly Congress would act.
“I think you can make an argument that this is a matter that deserves federal attention and protection, but given what we’ve seen over the last several years, it’s hard to feel confident that Congress is going to act to protect the privacy interests of the consumer,” Simitian said.
Simitian added that state action might “give the feds a gentle nudge.”

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