The hearing was designed to outline how phone records are ending up in the hands of data thieves and how to strengthen.
"Most of the reports show that pretexting is the method data brokers are using to obtain phone record information," Kevin Martin, chairman of the Federal Communications Commission, said at the hearing.
At Wednesday's hearing, Rep. Marsha Blackburn outlines details of the recently introduced Consumer Telephone Records Privacy Act of 2006.
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Pretexting is when a person impersonates another to gain sensitive information such as phone records and financial data. Other witnesses pointed to the use of bribery to obtain information as well as hacking into computer systems.
While several laws currently exist that allow federal regulators and law enforcement to go after people who obtain consumer data through illicit means, the hearing was aimed at devising specific laws to address the sale of phone records.
"Congress can make the commercial sale of phone records illegal and carry liabilities, and secondly, (Congress) can seek to overturn the 10th Circuit Court ruling where customers need to 'opt out' to prevent the sharing of their information to third-party telephone affiliates or joint-venture partners," Martin said at the hearing.
Before the 10th Circuit Court ruling, phone carriers had to obtain the explicit consent of a customer before forwarding his or her information to affiliate companies and joint-venture partners.
At Wednesday's hearing, FTC commissioner Jon Leibowitz discusses what Congress can do to stop the problem of telephone pretexters.
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During the hearing, Rep. Marsha Blackburn, R-Tenn., and Rep. Jay Inslee, D-Wash., discussed a bill they introduced Wednesday that's designed to impose fines and prison time on those who obtain another person's phone records under false pretenses. That bill is similar to one that was already introduced in the Senate.
Both Jon Leibowitz, a commissioner for the Federal Trade Commission, and Martin agreed that an outright ban on the commercial sale of phone records would serve as an easy and useful tool in curtailing the unauthorized distribution of data. Other witnesses scheduled to appear include Steve Largent, president of the Cellular Telecommunications and Internet Association; Marc Rotenberg, executive director of the Electronic Privacy Information Center; Edward Merlis, senior vice president of Law & Policy for the U.S. Telecom Association; and Robert Douglas, chief executive of PrivacyToday.com.
The lawmakers estimated that at least 40 data companies exist that obtain phone records by means of impersonating someone. They also projected that the number of such companies is growing.
Other efforts under way to protect customer records include serving subpoenas to data brokers in an effort to uncover the methods they use, as well as requiring phone companies to annually certify their methods for safeguarding their customers' information. The carriers, in turn, are.