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Tracey E.Schelmetic

[June 2, 2005]

Data Brokers Doomed to Walk the Same Path as Outbound Telemarketing

by Tracey E. Schelmetic
Editorial Director, CUSTOMER INTER@CTION Solutions´┐Ż

Rampant abuses by a few attracting the attention of politicians and legislation? A slew of state laws to be followed, plus pending federal legislation? Strong lobbyists arguing for self-regulation? Public outrage? Is it 2003 all over again, when outbound telemarketers found themselves bound to obeying a federal do-not-call list?

No, but it's like one of those formulaic romance novels where you merely change the names and occupations of the principal characters, slap a new photo on the cover and re-publish it.

This time, it's the personal data brokers getting the heat turned up. (Granted, in some instances, the outbound telemarketers and the data brokers are one and the same.) The recent and very public shakeups that followed the announcements by companies like ChoicePoint Marketing and LexisNexis, plus a half dozen others, that personal information on hundreds of thousands of people had been stolen by crooks, have begun the same domino-effect process that we saw two years ago with do-not-call legislation.

The only reason we even know about the loss of personal data by these companies is because of a California state law that requires the disclosure of such an event by a company. Were it not for California, the public would be none the wiser now. Based on these high profile data thefts, many other states have either passed or have pending legislation regarding the theft of these data (North Dakota's law went into effect yesterday). According to an article yesterday in the Washington Post (yes, there was a little news there that didn't involve the revelation of the identity of Deep Throat.)

The topic is also attracting Congressional attention in a big way. Though no official bill has been put forward yet, it's only a matter of time.

The Washington Post article, which may be found here,, states that, "But taken together, the state laws may backfire as businesses lobby Congress to enact new -- and most likely less stringent -- federal statutes to preempt what critics say is quickly amounting to a patchwork of disparate, confusing and costly new regulations."

I've got news for the data brokers: the outbound telemarketing industry has had to figure out how to navigate the state and federal patchwork. Ask them how it's done.


Tracey Schelmetic is Editorial Director for Customer Inter@ction Solutions Magazine.

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