FTC: Consumer Privacy Comments Concerning The Individual Reference Services--P974806/Part 2
C. The Distribution of Individual Reference Information
Individual reference service products are used by customers for a wide variety of beneficial purposes, some of which are discussed in the next section. The distribution of individual reference information depends on the type of customer seeking access to the information, and whether the information product is intended for non-selective commercial use or for selective and limited use.
1. Individual Reference Services Customers
Most customers of individual reference services are members of the legal community, businesses, private investigative agencies, or government agencies. Members of the legal community use individual reference services to locate and serve parties and witnesses. Such services can also assist lawyers in their efforts to enforce judgments and locate heirs to estates. Without the ability to quickly locate individuals involved in legal actions, many plaintiff lawyers would be unable to pursue a legal remedy. For example, an attorney may be unable to locate a defendant or necessary witness prior to the tolling of the statute of limitations. For these reasons, individual reference services are critical to members of the legal community, including established and well-respected law firms and process servers.
Other customers include businesses that use individual reference services to conduct "due diligence" prior to a company merger. A business conducting such research could use these services to verify corporate records and identify officers or general partners. In addition, businesses use individual reference services to prevent and detect fraudulent activity by, for example, verifying addresses prior to delivering merchandise or credit cards. These services are also used to locate business debtors, thereby assisting businesses in their collection efforts.
Government agencies, law enforcement agencies, and private investigators use these products to aid in a variety of investigations. For example, they use individual reference services to assist in locating abducted children and tracking down "deadbeat" parents. Such services are also helpful in locating bail jumpers or individuals with outstanding arrest warrants, thereby locating potentially dangerous individuals.
Thus, the vast majority of individual reference service customers are professionals who utilize these services for business purposes, or other purposes in the public interest.
2. Customer Applications and Authorizations
Individual reference service providers allow access to information about individuals contained in these databases primarily to subscribing customers with whom the provider has an established business relationship. Non-public information is provided exclusively to such customers. Consequently, the sponsors of this White Paper do not make available non-public information services for sale on the Internet. Customers utilizing individual reference services for the first time typically are required to fill out a service application and provide other information concerning their request for service. Service applications for individual reference services request information such as the business name, address, telephone number, business start date, and type of business.
Depending on the nature of the data requested by a new customer, the application process usually involves a credit check of the customer, thereby preventing fraudulent or illegitimate businesses from obtaining access to these services and databases. In order to utilize most individual reference services, a customer must establish an account with the provider. Only customers with adequate credit and verified account information are permitted to establish an account with the individual reference service provider. Most individual reference services, therefore, are only available to subscribers providing accurate and verified business and credit information.
3. Restrictions on Distribution of Information to Customers
In order to balance the privacy interests of individuals with the needs of their customers, individual reference service providers usually adopt one of two strategies. They may restrict the types of subscribers to whom they distribute their information and the uses these subscribers can make of the information. Alternatively, if they distribute information non-selectively, they may restrict the type of information made available to their subscribing customers.
a) Non-Public Information for Selective or Limited Distribution
Some individual reference service providers screen or qualify their customers before they allow them access to non-public information. In order to access such a product, these subscribers must provide a recognized purpose for such information and agree to limit their use and redissemination of such information. Database Technologies ("DBT"), for example, will accept only limited categories of subscribers who are required to verify information about themselves prior to obtaining access. Specific examples of acceptable DBT subscribers include: law enforcement agencies, government agencies, licensed fraud investigators, attorneys, and corporations. DBT also employs verification procedures and background research to determine the legitimacy of the potential subscriber. Corporations applying for access to the DBT databases must meet a multi-million dollar annual revenue threshold requirement and must be in good standing with the Better Business Bureau.
Additionally, accepted DBT subscribers must adhere to specific subscriber rules in order to retain access to the database information. The subscriber rules prohibit DBT subscribers from using the information for any illegal purpose and from giving or selling database information for any purpose to any unauthorized or unidentified person or business. DBT will terminate service to any subscriber it finds in violation of these rules. Thus, non-public information may be distributed to select subscribers under certain terms and conditions of use.
b) Non-Public Information for Non-Selective Distribution
Individual reference service providers who furnish their products to a non-selective commercial group of subscription customers often take steps to limit the content of their non-public information products. For instance, an individual's social security number--if contained in non-public information products used in non-selective commercial distribution--is often truncated or not displayed in order to address privacy concerns. Metromail, on the other hand, will not provide information such as social security numbers or purchase history information. LEXIS-NEXIS suppresses the display of all social security numbers in its P-TRAK database, but allows a search to be conducted by entering a known social security number.
Individual reference service products available for non-selective commercial distribution may contain a notice informing customers of the permissible uses of certain database information. The P-TRAK product from LEXIS-NEXIS, for instance, provides an online notice explaining prohibited uses of individual reference data under the Fair Credit Reporting Act prior to gaining access to the P-TRAK database. It reads: "The Fair Credit Reporting Act (15 U.S.C. § 1681) prohibits use of information from this file to determine a consumer's eligibility for credit or insurance for personal, family or household purposes, employment or a government license or benefit."
Absent parental consent, LEXIS-NEXIS, Metromail, and other individual reference service providers avoid making available for wide commercial distribution non-public information about individuals identified in the product or service as being under the age of 18. Other individual reference service providers, such as DBT and IRSC, may make non-public information about minors available for limited distribution only to select customers under strict terms and conditions of use, such as searching for abducted children.
IMPORTANT AND APPROPRIATE USES OF INDIVIDUAL REFERENCE SERVICES
Individual reference services have a wide array of productive and socially important uses. The following discussion describes some of the appropriate ways in which such services are used to help people, protect consumers, and assist law enforcement efforts. In fact, individual reference services are often the only way in which individuals with limited resources, through the assistance of a professional who has access to these services, can obtain critical information. The examples provided below illustrate some of the important functions these services perform, and demonstrate the continuing need for these valuable resources. There is a wealth of examples and products with respect to each use discussed below. For simplicity's sake, one company's products typically illustrate each use, even though other reference service products often perform the function equally well.
A. Fraud Prevention
Individual reference services play a significant role in preventing and investigating financial fraud. The Trans Union National Fraud Center estimates that fraud costs American consumers more than $500 billion annually.(9)
Unfortunately, law enforcement agency efforts to combat fraud are often hindered by a lack of adequate resources. Law enforcement agencies are often understaffed, undertrained, or ill-equipped to address the attention required by a fraud investigation.(10)
Therefore, private organizations and private investigative tools, such as individual reference services, are critical to curbing the effects of fraud.(11)
Credit grantors are major users of the services for precisely this purpose. Individual reference services help credit card issuers and banks combat identity and account takeover fraud by assisting them in weeding out fraudulent applications. Issuers and banks use the services to cross-check names, addresses and social security numbers. If the issuer or bank becomes suspicious of an application because the information provided is incorrect, it can send the applicant a letter requesting supporting documents, such as a utility bill, to validate the data supplied. Thus, the services prevent identity fraud before it can occur.
For example, a Minnesota-based bank used individual reference services to verify application information for checking and savings accounts to determine whether the account was fraudulent. During one month of using the individual reference services, the bank prevented a potential loss of $5,120. The cost of using these services was approximately $444, thereby resulting in a cost savings of $4,676 for that month. The bank anticipates its potential fraud losses to be approximately $78,000 per year, and that use of individual reference services will produce a 50 percent reduction in new account fraud and associated losses.
Similarly, these services are used to uncover insurance fraud. In one recent example, an investigator employed by California-based General Accident Insurance Company discovered 18 allegedly fraudulent personal injury claims totaling over $100,000 filed by a couple under a variety of false names. After checking a CDB Infotek database and discovering that the suspects had filed claims under fictitious names, the investigator forwarded his information to California authorities, resulting in the arrest of the claimants, and of a chiropractor who allegedly furnished fraudulent medical reports supporting the claims.
In preventing fraud, businesses and individuals outside the financial services and insurance industries often perform "due diligence" using a variety of individual reference services in order to minimize the risk of financial fraud in business transactions. In one instance, a reference product of DBT was used to conduct a background investigation into a fraudulent business operation seeking to sell bogus franchises throughout the southeastern United States. The results of the investigation prevented Florida residents from investing $30,000 each into the fraudulent operation. The matter was referred to the Florida Attorney General's Office, which is currently investigating this business. The information obtained through DBT revealed the fraudulent nature of the operation and protected these Floridians from the fraud.
Individual reference services can likewise help individuals who have been the victims of fraudulent dealings. For example, DBT's AutoTrack public record service recently was used to locate a convicted con artist in upstate New York. The con artist had convinced an elderly woman to authorize her as a co-signer on the elderly woman's credit cards and then proceeded to charge over $100,000 to those credit cards. Although the elderly woman knew only the name and estimated age of the con artist, the AutoTrack service revealed the con artist's identity, including a history of fraudulent activity. The information obtained through AutoTrack has been referred to the authorities for further action.
B. Child Support Enforcement
Individual reference services have proven to be invaluable in tracking down parents who are delinquent in their child support obligations. In this way, these reference services can advance personal responsibility, give much-needed income to divorced parents and their children, help to free families from welfare dependency, and provide a source of additional revenue to state welfare programs. Individual reference services are most advantageous in that they can locate non-custodial parents quickly and inexpensively. For example, The Association for Children for Enforcement of Support, Inc. ("ACES") uses individual reference services to assist families--approximately 80 percent of whom are on welfare--in locating parents who have failed to meet legal child support obligations.(12) ACES recently reported a 90 percent success rate in locating "deadbeat parents" using LEXIS-NEXIS's P-TRAK service.
Investigative sources indicate that outstanding child support debts are often in the thousands of dollars. One investigator who uses individual reference services noted that he often sees past due child support debts of between $20,000 and $30,000. Dollar amounts such as these make a tremendous difference in the lives of children on welfare and other public assistance programs. Thus, the ability to locate "deadbeat parents" through the use of individual reference services can help free families from welfare dependency and play an important role in welfare reform.
C. Uniting Separated Families
Yet another important function of individual reference services is that of uniting separated families. On one occasion, an investigator in California received a request from a woman in Texas who was trying to locate her sister. The sister had been suffering from a mental condition and had not been heard from in over a year. She was last known to be living somewhere in San Diego, California. The investigator was able to locate the missing sister through the use of a local public records database. When the investigator finally located the woman, she was in a debilitated condition, had been evicted from several residences, and was malnourished. After locating her sister, the Texas woman was able to bring her home where she could best care for her.
Individual reference services also are used successfully to recover family abduction victims. For example, the National Center for Missing and Exploited Children uses CDB Infotek to locate abducted children and their abductors. Through information obtained from CDB Infotek, the Center can assist and focus local law enforcement efforts. Private investigators also have had great success in locating abducted children through the use of other individual reference databases. For example, recently, a two-year-old child who had been abducted by his criminal father was located using DBT's services.
D. Locating Heirs to Estates
Individual reference services offer a cost-effective means by which an estate's attorney/executor can locate missing estate heirs. Because several years may have transpired since a will was executed, heirs and witnesses often have relocated or married, making it difficult to locate beneficiaries. In one instance, LEXIS-NEXIS's P-TRAK service was used to help locate a destitute Montana farmer who was entitled to a $4 million inheritance.
In another case, a minimal amount of information was used to help locate an heir who had been out of contact with her brother for 43 years. A private investigator in Pittsburgh, Pennsylvania used a credit header database to locate a missing heir to a $100,000 inheritance, a 73-year-old woman who had been committed to a state mental hospital in 1953. Unfortunately, the woman's medical records from the state mental hospital had been destroyed in a fire in 1979, and the executor of the estate was unable to determine her whereabouts. Partly through the use of credit header data, a private investigator was able to locate the woman and give her the money the brother had left her. The investigator also located the woman's daughter, and placed them in contact with one another for the first time since 1953.
E. Locating Pension Fund Beneficiaries
Pensions are an important source of supplemental income for millions of elderly Americans. In some cases, however, a pension fund beneficiary never receives this income because their current address is unknown to the pension fund trustee or administrator. To ensure that pension fund beneficiaries receive the money owed to them, the plan administrator as a matter of federal law is required in some cases to use a commercial locator service to search for missing beneficiaries. Pension Benefits Guaranty Corporation regulations require that a pension fund administrator conduct a diligent search for the pension fund beneficiary, including "use of a commercial locator service to search for the missing participant."(13)
Although it may have been years since the beneficiary was employed by the company, tax records provide the employee's social security number. The social security number can then be used to track the individual in the individual reference database. Thus, such databases provide a simple and cost-effective means by which to locate missing pension fund beneficiaries.
F. Consumer Protection
As noted above, individual reference services also are used to verify professional licenses and background information in order to safeguard members of the public. For instance, CDB Infotek, LEXIS-NEXIS, and IRSC are used to obtain information regarding the certification and/or status of licensed professionals, such as doctors, dentists, and lawyers. In addition, employers may use individual reference services to conduct research about individuals seeking to provide child care or care for the elderly. Background information obtained through individual reference services can reveal a history of violent or criminal behavior posing a risk to public safety.
In the past, the backgrounds of individuals applying for employment in day care centers or health care facilities would be researched through a time-consuming and costly manual review of public record systems, including court records and county, state and federal records. Online individual reference services are now able to provide comprehensive information quickly at low cost. This quick and inexpensive access to public record information will encourage businesses to obtain information about job candidates, thereby helping to curb crime and violence in service professions and in the workplace generally.
G. Locating Organ and Bone Marrow Donors
Due to the mobile nature of our society, donor organizations find it difficult to retain accurate donor information. The ability quickly to locate a lost family member or matching donor can mean the difference between life and death. The ability to search individual reference databases saves critical time and resources, thereby assisting donor programs in their efforts to match donors and save lives.
Donor retention is a serious problem for organizations attempting to match donors. Although donor programs collect extensive information upon registration, potential donors can remain in the donor registry for years before being contacted, and often have moved from the listed location. Thus, for example, the National Marrow Donor Program in Minneapolis uses individual reference services to locate missing donors quickly. The Marrow Donor Program of the American Red Cross in Southern California was able to reduce its "unable to contact" list by 17 percent through the use of such services.
These services also are useful in quickly locating transplant candidates among missing family members. For example, a private investigator in Missouri, used an individual reference service database to locate a missing sibling who subsequently donated a kidney for a successful kidney transplant operation. In cases like these, an individual's life may literally depend upon instant access to databases containing identifying information.
H. Promoting the Integrity of the Political Process
Public record products perform an important function in advancing the transparency of government operations and the political process. The LEXIS-NEXIS database of Federal Election Commission filings, for example, affords the press and government watchdog groups such as Common Cause, as well as the political parties themselves, easy access and flexible search capability to review records of federal political campaign contributions. The LEXIS-NEXIS databases also have been used to obtain information in investigations of political corruption. Moreover, both the Democratic National Committee and Republican National Committee now use the LEXIS-NEXIS public record databases to run checks on political contributors.
I. Significant Journalistic Endeavors
Individual reference services also assist members of the press in their efforts to obtain comprehensive and accurate information. The information obtained through individual reference services has not only increased the depth and breadth of news coverage, but also has resulted in more accurate and detailed reporting.(14) Reporters often use individual reference services to verify information and conduct background research in order to engage in responsible reporting. For example, one reporter used an individual reference service database to identify and locate presidential campaign contributors whose contributions were solicited illegally.(15) The resulting news story triggered an investigation and fines.(16) Without access to this information, the illegal activity may never have been discovered.
J. Apprehending Criminals
Information obtained from individual reference services is used to apprehend individuals eluding law enforcement. For example, U.S. marshals who recently attended a training session on the CDB Infotek system in Dallas, Texas were able to apprehend two fugitives using the CDB system. As part of the demonstration, the U.S. marshals entered the names of two fugitives. The system returned information on the fugitives and listed a nearby location. Law enforcement officers were dispatched to the scene and the fugitives were immediately apprehended.
Individual reference services also are used to locate bail jumpers with outstanding felony warrants and, according to investigators utilizing such services, information obtained through these services has been used to apprehend these individuals. DBT's AutoTrack service, for example, has been used by local sheriffs' offices to find wanted felons for several years.
K. Aiding Citizens in Obtaining Access to Public Record Information
By recreating existing public record systems online, individual reference service providers facilitate access to information the government has intended be disclosed to the public. Online public record databases permit citizens to access quickly and cost effectively information contained in court records, land records, and licensing records. Making public records more widely available furthers the openness of government operations. For example, as discussed at greater length on pp. 5-6 above, access to court records through services such as LEXIS-NEXIS furthers the openness of the judicial proceedings.
In addition, in many instances, online access through these services furthers the specific purposes for which government has made the records available. For example, individuals purchasing real property use land and lien public record databases to verify title to the property and to determine whether it is subject to any encumbrances. LEXIS-NEXIS's INCORP database is commonly used to identify corporate officers or general partners. Professional license databases, such as that of CDB Infotek, are used to confirm that someone is in fact licensed to engage in a profession. All of these uses advance the purposes for which government made the information available in the first place, while permitting individuals and businesses to obtain such information quickly in a more cost-effective manner.
As discussed in the previous section, individual reference services are an important tool for fighting identity fraud. Ironically, however, critics of these databases have made unsubstantiated allegations that they are used to perpetrate identity fraud. A recent Federal Reserve Board study explored this issue in detail and concluded that there was no evidence to support such contentions.
Because allegations about identity fraud are a serious matter, Congress in the fall of 1996 commissioned the Federal Reserve Board study to examine these allegations. In the course of this study, the Federal Reserve examined the relationship between databases containing sensitive information and the problem of identity fraud. It actively solicited evidence of identity fraud stemming from use of these databases, and received comments from over 100 commenters, among them consumer advocates, state consumer protection agencies, credit card companies, and banks and credit unions. Not one commenter offered any specific evidence of use of such a database for identity fraud.
Several financial institutions submitted comments stating clearly that individual reference databases, far from promoting identity fraud, are a useful tool to prevent it. Banc One Corporation stated that continued availability of social security number and other consumer identifying information "from large database services . . . is an invaluable tool . . . for verification systems used by financial institutions to reduce losses occasioned by fraud."(17) NationsBank noted that "SSNs are also used in programs that help detect fraudulent activity."(18) The Credit Union National Association added that without access to social security numbers, "financial institutions have a very difficult time detecting account fraud."(19)
Accordingly, the Federal Reserve's Report expressed concern about the problem of identity fraud, but found that "[t]here is little 'hard' evidence on how fraud due to the usage of sensitive information occurs, the frequency with which it occurs, or the amount of associated losses."(20) In fact, the Report and the comments on which it was based presented no evidence whatsoever that individual reference databases promote identity fraud.
By contrast, the Federal Reserve Report strongly suggested that illegal means of acquiring information to commit identity fraud are the real problem. The Report noted that "unlawful access to sensitive information may often be the precursor to this type of fraud." It added that "[t]he number of ways in which a person can illegally obtain information that will enable fraud to be committed is virtually limitless."(21) For example, credit fraud is typically perpetrated by stealing credit card numbers, intercepting credit card applications and filling them out in the name of the person to whom the application was addressed and, in some cases, by obtaining fraudulent access to below-the-line credit report information.(22)
In reality, as several of the commenters noted, eliminating or sharply restricting individual reference services would not curb identity fraud, but instead would permit it to continue with one less tool for preventing or stopping it. The Consumer Bankers Association stated that limiting its members' access to social security numbers and other identifying information about its customers "may increase, rather than reduce, the risk of fraud or other loss to the banking system."(23)
First Data Corporation--which provides transaction processing, application processing, and fraud detection and prevention activities to VISA, MasterCard, and other credit card issuers--noted that restricting access to information about the name, current and prior residential address, social security number, and date of birth of individuals "could well hinder the most effective means of combating this particular type of financial fraud."(24)
Trans Union National Fraud Center added that consumer identifying information "is necessary to locate not only the perpetrators of fraud and their ill-gained assets but also witnesses and, in the case of identity theft, victims."(25)
Thus, the most effective course of action for policymakers concerned about identity fraud is to focus on measures to prevent identity fraud via use of illegally obtained credit information, while permitting law enforcement and private sector use of individual reference services and other tools for fraud prevention.
RESPONSIBLE INDUSTRY PRACTICES REGARDING
DISCLOSURE OF INFORMATION
Self-regulation can be very effective at protecting consumer privacy, particularly in global online media. Industry adherence to self-regulatory practices usually can address consumer concerns more promptly and more cost effectively--and provide industry with the flexibility to adapt to the challenges of a global marketplace--than the legislative or regulatory processes.
The sponsors of this White Paper--leading companies of the individual reference service industry--recently pledged to follow 12 self-regulatory principles. By subscribing to these principles, the companies are obligating themselves to comply with them. Failure to comply may result in a violation of the Federal Trade Commission Act or state statutes regulating unfair and deceptive trade practices.
The focus of these 12 self-regulatory principles is non-public information--information about an individual that is of a private nature and not generally available to the public nor obtained from a public record. Public record information or directory information obtained from public records or publicly available information, for example, is not subject to restrictions. These principles can be summarized as follows:
First, with regard to the public in general, the companies--individually and through their industry groups--committed to making efforts to educate users and the public about privacy issues, the types of services they offer, and the benefits of the responsible flow of information.
Second, with regard to the information they collect and maintain, the companies committed to:
Acquire individually identifiable information from known sources in the government and private sectors;
Take reasonable steps to help ensure the accuracy of the information in their services; and
Implement facilities and security systems to protect information from unauthorized access and persons who may exceed their authorization.
Third, with regard to the non-public information products they distribute, each company committed to protecting against the misuse of the information. The measures each company takes depend on the breadth of their likely commercial distribution of the information and the knowledge the company has of particular customers.
For non-public information products intended for selective commercial distribution, the companies committed to distributing such products in a limited manner by providing them only to qualified subscribers who have a recognized purpose for such information and who agree to limit their use and redissemination of such information. The nature of the non-public information being requested will determine the level of review a company undertakes of the subscriber and the intended use of the information.
For other non-public information products, the companies committed to providing the products only to persons with whom they have a commercial relationship and to limiting certain information in these distributed products in a manner that addresses privacy concerns (e.g., truncating or not displaying social security numbers in products derived from credit headers).
Fourth, with regard to children, each company committed to not provide for non-selective commercial distribution non-public information about individuals identified as being under the age of 18 without parental consent.
Fifth, with regard to consumers, each company committed to:
Inform consumers, upon request, of the choices available to limit access or use of information about them in its database, and direct consumers who have specific inquiries about public record information to the governmental source of the information; and
Upon request and reasonable terms, inform an individual about the individually identifiable information that it makes available in products and services, and whether the products and services it makes available for non-selective commercial distribution contain non-public information about them, and the source or type of source of that information.
In addition to self-regulation, market forces also help drive responsible industry practices. Before the leaders in this industry formally embraced self-regulation, the importance of satisfying customers and the public at large led them to make other voluntary decisions to restrict access to information that may raise public concerns. For example, CDB Infotek and LEXIS-NEXIS each separately decided to truncate or not to display social security numbers in their credit header products. Database Technologies and IRSC confined access to their non-public information to a narrow range of qualified customers.
Self-regulation and voluntary restrictions on individual reference information is supplemented by existing laws, including criminal and civil fraud statutes that punish identity fraud, fair credit reporting statutes that prohibit disclosure of individual credit information, and invasion of privacy tort law that punishes and deters violations of individuals' privacy rights.
THE CONSTITUTION PROHIBITS MUCH POTENTIAL
REGULATION OF INDIVIDUAL REFERENCE SERVICES
As discussed earlier, public record information is a cornerstone of many individual reference service products. Efforts to regulate these services would not only jeopardize the numerous public benefits that flow from use of individual reference services, they also would encounter serious constitutional obstacles to the extent that they sought to regulate public record information. This section summarizes the arguments set forth in Appendix A.
A. First Amendment
Strong First Amendment interests are implicated in the distribution of individual identifying information obtained from public records. Indeed, courts that have been called upon to balance these interests against government-asserted privacy interests have frequently invalidated government regulations designed to restrict publication or use of public record data.
In a series of cases beginning in 1975, the U.S. Supreme Court has held that personal privacy concerns do not permit the government to prohibit the publication of truthful information in the public record. For example, the Court has held repeatedly that neither the protection of the identity of a rape victim nor any other governmental interest is sufficiently compelling to permit the government to penalize the publication of truthful information when the government itself made the information available to the public.
Lower courts have followed this line of reasoning and applied it to a range of different situations. A recent state appellate court, for example, applied this First Amendment doctrine in striking down California's consumer protection law banning credit reporting agencies from including in their reports certain information obtained from the public files of the landlord tenant court.
Other cases turn on the issue of the constitutional protection afforded to "commercial speech"--expression related solely to the economic interests of the speaker and its audience. Since the U.S. Supreme Court's landmark decision in 1976 expanding the constitutional protection afforded to commercial speech, restrictions based on the commercial use of public record data--like the restrictions placed on the non-commercial use of public records--have often been found to run afoul of the First Amendment.
In a 1980 case, for example, the Maine supreme court struck down a provision of the state's Fair Credit Reporting Act (FCRA) that prohibited inclusion in consumer reports of certain public record information that was more than seven years old. The court concluded that, by banning constitutionally protected commercial speech, the statute ran afoul of the First Amendment. Other courts also have invoked this 20-year-old doctrine in striking down statutes attempting to curb the use of other types of public records.
Consequently, federal or state attempts to regulate the distribution of public record information would be subject to probing First Amendment scrutiny regardless of whether courts considered the regulation to be directed at non-commercial or commercial speech. These First Amendment doctrines are additional reasons cautioning strongly against extending FCRA-style regulation to public record information.
B. Tenth Amendment
To avoid First Amendment problems, the Congress could attempt to dictate to the states what information in their public record systems the states could make available to the public. However, efforts to block the distribution of public records information at its principal sources--state and local governments--are clearly the sort of interference with state functions that raises serious Tenth Amendment problems.
The Tenth Amendment provides that "[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." During the past decade, the Supreme Court, as well as several lower courts, have revived the Tenth Amendment, giving its protections of state autonomy broad interpretation in striking down federal laws imposing obligations upon state and local officials in connection with matters as diverse as child protection, waste disposal, timber exportation, and handgun control. Indeed, the State of South Carolina late last year filed a Tenth Amendment action challenging the validity of the Drivers' Privacy Protection Act (DPPA), which restricts states from disclosing or disseminating state driver's license and motor vehicle records. Similar challenges are almost certain to flow from any federal efforts to regulate the dissemination of state or county records.
Thus, while the First Amendment prohibits government regulation of the distribution of information contained in public records, the Tenth Amendment offers similar protection against the federal government's ability to dictate to state and local governments what information in their record systems they may make publicly available.
This futility of limiting the distribution of public record information is a compelling additional reason to prefer self-regulation to government-imposed regulation of individual reference services.