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Bank To Pay $50 Million For Buying Personal Data

From 2000 to 2003, the bank bought data containing personal information of hundreds of thousands of drivers living in several Florida counties for only $5,656, according to court documents.

A bank has been ordered to pay a $50 million settlement for buying more than 650,000 names and addresses from the Florida Department of Highway Safety and Motor Vehicles.

The Electronic Privacy Information Center, which filed an amicus brief in favor of the plaintiffs, announced the decision this week. EPIC said Fidelity Federal Bank & Trust bought 656,600 names and addresses for use in direct marketing and the purchase violated the Drivers Privacy Protection Act.

The federal law was enacted in 1994, before a vast number of "find people" sites were popular on the Internet. It aims to protect drivers from having their personal information distributed because stalkers and other criminals had used motor vehicle records to locate victims.

The death of actress Rebecca Schaeffer prompted a California law that became a model for the federal legislation. Schaeffer was killed outside her home in 1989 by an obsessed fan who had paid an investigator to find her address. Other crimes " including a series of home robberies targeting people who drove expensive cars and harassment of women who had been to reproductive clinics " motivated legislators to pass the federal law.

From 2000 to 2003, Fidelity purchased data containing personal information of hundreds of thousands of drivers living in Palm Beach, as well as Martin and Broward counties for only $5,656, according to papers filed in Kehoe v. Fidelity Federal Bank and Trust. The bank sought the information for car loan solicitations, according to papers filed in the class-action lawsuit.

In 2004, the U.S. District Court for the Southern District of Florida ruled that James Kehoe had to demonstrate actual damages before obtaining monetary compensation under the Drivers Privacy Protection Act. Kehoe appealed to the 11th Circuit Court of Appeals, which overturned that ruling.

EPIC joined the suit and stated that the case represents a step in trying to address the collective threat that the data trade poses to privacy.

"While Kehoe involves just a single bank using data for marketing, thousands of other businesses are trading in your personal information, resulting in a society that is losing autonomy and control over personal data," the organization stated on its Web site.

Marc Rotenberg, executive director of EPIC, said during an interview Tuesday that the organization joined the suit to push for damage awards when privacy laws are violated. He said that is critical to ensuring the laws are effective.

Although states and individuals recognize the importance of protecting privacy, Congress has yet to come up with adequate privacy legislation for Internet based services, which provide the same type of information the motor vehicle privacy law was designed to protect, Rotenberg said.

EPIC has pointed out that Florida's failure to change its state law in 1999 to reflect amendments to the federal law resulted in weaker privacy protections for Floridians than for residents of other states. The organization said ChoicePoint's AutoTrackXP services include 36 extra databases about Florida residents' marriage records, beverage licensees, concealed weapons permits, day care licensees, handicapped parking permits, worker compensation, medical malpractice, and salt water product licensees.

Fidelity representatives said they were preparing for Tropical Storm Ernesto and could not provide immediate comment on the settlement. The Florida law firm representing the bank did not return calls seeking comment.

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