Securities and Exchange Commission
Proposed Rule on
Privacy of Consumer Financial Information
File No. S7-6-00
Gail H. Littlejohn
Vice President, Government Affairs
Steven M. Emmert
Director, Government Affairs
Reed Elsevier Inc.
LEXIS-NEXIS Group 202/861-3900
1150 18th Street, N.W.
Washington, DC 20036
Piper Marbury Rudnick & Wolfe LLP
1200 19th Street, N.W.
Washington, D.C. 20036
March 31, 2000
LEXIS-NEXIS Group is pleased to submit these comments in response to the notice of proposed rulemaking on the privacy of consumer financial information. The proposed regulation would implement Title V of the Gramm-Leach-Bliley Act.
LEXIS-NEXIS is a founding member of the Individual Reference Services Group (IRSG), which has filed comments in this proceeding. We incorporate the IRSG's comments and write separately to emphasize the importance of preserving the commercial availability of identifying information from consumer reporting databases.
LEXIS-NEXIS Group, a division of Reed Elsevier Inc., is headquartered in Dayton, Ohio, employs more than 7,700 individuals, and is the world's leading provider of premium, branded information services and management tools in Internet, dial-up, CD-ROM, and hard copy formats for legal, business and government professionals. Serving customers in more than 60 countries, sales representative are located in 50 U.S. cities and around the world, including London, Frankfurt, Hong Kong and Toronto.
LEXIS-NEXIS leads the information industry with the largest one-stop, dial-up information service, the LEXIS-NEXIS service for legal, business, and government professionals. In addition, it markets the web-based lexis.com to the legal professional and LEXIS®-NEXIS® Universe to business and government users. The LEXIS-NEXIS service contains more than 2.5 billion documents in more than 26,000 databases.
Today, 1.9 million professionals worldwide-lawyers, accountants, financial analysts, journalists, law enforcement officials, and information specialists-subscribe to the LEXIS-NEXIS services. They perform more than 600,000 searches per day.
All of our subscribers enter into formal agreements with LEXIS-NEXIS that define the limits and appropriate uses of information obtained from our databases.
The "People Locator" Products That Rely Upon Identifying Information From Consumer Reporting Databases
The NEXIS service currently contains nine "people locator" files or products that use identifying information obtained from consumer reporting databases. Limits on the distribution and use of these NEXIS products are governed by IRSG Principles V.A and V.B.
Principle V.A, intended for selective and limited distribution, requires that individual reference services pre-qualify the subscribers that will have access to the information according to established qualifications, and distribute the information to only the qualified subscribers. It also sets out record-keeping requirements concerning subscriber use. Our X-TRAK and X-SEEK products are made available only to our pre-qualified V.A subscribers.
Our typical subscriber to the X-TRAK and X-SEEK products is a law enforcement agency that uses the information to locate criminals, fugitives, suspects, and witnesses to criminal activities. These products are particularly useful when conducting nationwide searches or when looking for information on individuals from areas outside the normal geographic territory covered by the agency. Law enforcement agencies also use the information for safety reasons by identifying a suspect's neighbors when conducting a raid on a particular address.
IRSG Principle V.B requires that individual reference services establish their subscribers' commercial or professional uses of the information, distribute the information to only these subscribers, and require their subscribers to use the information in accordance with their commercial or professional purposes. Our P-TRAK, P-SEEK, and P-SRCH products are examples of the type of files made available to our V.B subscribers. They differ from our V.A products in that they do not display Social Security Numbers of individuals and any birth information is truncated to reveal only month and year of birth.
Lawyers are typical subscribers to the P-TRAK, P-SEEK, and P-SRCH products. They routinely use the information to locate witnesses, heirs, and beneficiaries; conduct due diligence investigations of financial representations; find assets to satisfy judgments; and track down non-custodial parents who owe child support. They also use the information to notify putative members of a class action suit and identify other parties with a financial stake in the outcome of cases.
Non-profit organizations also use our V.B products. For example, the Association for Children for Enforcement of Support ("ACES"), the leading child support advocacy organization, uses LEXIS-NEXIS' P-TRAK service to assist families-approximately 80 percent of whom are on welfare-in locating parents who have failed to meet legal child support obligations. ACES has reported tremendous success with the service, locating over 75 percent of the "deadbeat parents" they sought, helping families to receive much-needed support.
The use of P-TRAK by ACES for child support enforcement underscores one of the several compelling uses of reference services. Whereas government-compiled child support databases have encountered difficulties in some instances, individual reference services have proven to be invaluable in tracking down parents who are delinquent in these obligations. In this way, these services advance personal responsibility, give much-needed income to divorced parents and their children, help to free families from welfare dependency, and provide an additional source of additional revenue to state welfare programs.
Individual reference services can locate non-custodial parents quickly and inexpensively, even in circumstances where they move to a different state or begin using a different name. Importantly, individual reference services also empower individuals to take charge of their own lives as the users need not be dependent upon the assistance of government agencies to enforce their support orders.
The continued availability of identifying information from consumer reporting databases makes it possible for non-profit organizations such as ACES, lawyers and other professionals, and law enforcement officials to carry out their legitimate goals more effectively.
As a founding member of the IRSG, LEXIS-NEXIS fully appreciates the important and socially beneficial role that identifying information from consumer reporting databases can play in our information society and, therefore, concurs with the comments filed by the IRSG in these proceedings. We write separately to emphasize the importance of the continued commercial availability of such identifying information.