Vermont Enacts Nation’s First Data Broker Legislation
Recently, Vermont enacted legislation (H.764) that regulates data brokers who buy and sell personal information. Vermont is the first state in the nation to enact this type of legislation.
Definition of Data Broker. The law defines a “data broker” broadly as “a business, or unit or units of a business, separately or together, that knowingly collects and sells or licenses to third parties the brokered personal information of a consumer with whom the business does not have a direct relationship.”
Definition of “Brokered Personal Information.” “Brokered personal information” is defined broadly to mean one or more of the following computerized data elements about a consumer, if categorized or organized for dissemination to third parties: (1) name, (2) address, (3) date of birth, (4) place of birth, (5) mother’s maiden name, (6) unique biometric data, including fingerprints, retina or iris images, or other unique physical or digital representations of biometric data, (7) name or address of a member of the consumer’s immediate family or household, (8) Social Security number or other government-issued identification number, or (9) other information that, alone or in combination with the other information sold or licensed, would allow a reasonable person to identify the consumer with reasonable security.
Registration Requirement. The law requires data brokers to register annually with the Vermont Attorney General and pay a $100 annual registration fee.
Disclosures to State Attorney General. Data brokers must disclose annually to the State Attorney General information regarding their practices related to the collection, storage or sale of consumers’ personal information. Data brokers also must disclose annually their practices, if any, for allowing consumers to opt out of the collection, storage or sale of their personal information. Further, the law requires data brokers to report annually the number of data breaches experienced during the prior year and, if known the total number of consumers affected by the breaches. There are additional disclosure requirements if the data broker knowingly possesses brokered personal information of minors, including a separate statement detailing the data broker’s practices for the collection, storage and sale of that information and applicable opt-out policies. Importantly, the law does not require data brokers to offer consumers the ability to opt out.
Information Security Program. The law requires data brokers to develop, implement and maintain a written, comprehensive information security program that contains appropriate physical, technical and administrative safeguards designed to protect consumers’ personal information.
Elimination of Fees for Security Freezes. The law eliminates fees associated with a consumer placing or lifting a security freeze. Previously, Vermont law allowed for fees of up to $10 to place, and up to $5 to lift temporarily or remove, a security freeze.
Enforcement. A violation of the law is considered an unfair and deceptive act in commerce in violation of Vermont’s consumer protection law.
Effective Date. The registration and data security obligations take effect January 1, 2019, while the other provisions of the law take effect immediately.
In a statement, Vermont Attorney General T.J. Donovan said, “This bill not only saves [Vermonters] money, but it gives them information and tools to help them keep their personal information secure.”
Blog courtesy of Hunton Andrews Kurth, a U.S.-based law firm with a Global Privacy and Cybersecurity practice that’s known throughout the world for its deep experience, breadth of knowledge and outstanding client service. Read the company’s privacy blog here.