Press Releases

 WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), Vice Chairman of the Senate Select Committee on Intelligence, issued the following statement on reports from the New York Times and the Guardian  that Cambridge Analytica misused the data of millions of Facebook users:

"This is more evidence that the online political advertising market is essentially the Wild West. Whether it's allowing Russians to purchase political ads, or extensive micro-targeting based on ill-gotten user data, it's clear that, left unregulated, this market will continue to be prone to deception and lacking in transparency. This is another strong indication of the need for Congress to quickly pass the Honest Ads Act to bring transparency and accountability to online political advertisements."

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WASHINGTON – Today, U.S. Sen. Mark R. Warner (D-VA), Vice Chairman of the Senate Select Committee on Intelligence, issued the following statement in response to the Federal Election Commission (FEC)’s announcement that commissioners have approved a Draft Notice of Proposed Rulemaking on two proposals dealing with disclosure rules for online political advertisements:

“While I applaud the FEC for moving forward today, my hope was that the simple and overdue act of strengthening these disclaimer rules would have been completed by now. The Commission’s current plan, which contemplates yet another round of comments, means rules concerning online political ads remain woefully behind the commonsense standards we apply to political ads on TV and other media – just as the country begins the primary season for the upcoming 2018 mid-term elections.

“Congress must recognize that our current laws are simply not adequate to deal with the national security threats we face from foreign adversaries like Russia, and other bad actors. While no one law alone will completely protect our democracy, updating our election laws is a simple and important start. Bipartisan legislation like the Honest Ads Act is needed to bring true parity between digital political ads and ads running on broadcast, satellite, and cable services.”

Russia attempted to influence the 2016 presidential election by buying and placing political ads on platforms such as Facebook, Twitter and Google. However, Americans had no way of knowing who was behind the ads, because, unlike radio and television ads, the FEC has exempted large swathes of online ads from general requirements to include disclaimers about who is responsible for the content.

In November 2017, Senator Warner led a number of his colleagues in calling on the FEC to take immediate action to improve transparency for political advertisements online. That effort followed Senator Warner’s introduction in October 2017 of the Honest Ads Actbipartisan legislation that would prevent foreign actors from influencing our elections by ensuring that political ads sold online are covered by the same rules as ads sold on TV, radio, and satellite.

According to the FEC, the public will now have 60 days to provide comments on two alternative proposals, one Republican-sponsored and one Democrat-sponsored, to amend FEC regulations concerning disclaimers on public communications on the internet that contain express advocacy, solicit contributions, or are made by political committees.

 

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WASHINGTON – On Net Neutrality National Day of Action, U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) joined a group of Senate and House Democrats in introducing a Congressional Review Act (CRA) resolution to overturn the Federal Communications Commission’s (FCC) partisan decision on net neutrality. The Senate CRA resolution of disapproval stands at 50 supporters, including Republican Sen. Susan Collins (R-ME). The House resolution currently has 150 co-sponsors.

The FCC’s Open Internet Order prohibited internet service providers from blocking, slowing down, or discriminating against content online. Repealing these net neutrality rules could lead to higher prices for consumers, slower internet traffic, and even blocked websites. A recent poll showed that 83 percent of Americans do not approve of the FCC’s action to repeal net neutrality rules.

“From the start, the FCC’s process to determine whether to keep previously established rules that guarantee a free and open internet was marred by partisan fights and troubling irregularities in the public comment system,” said the Senators. “By repealing these open internet principles, we believe the agency greenlighted potential anti-competitive practices that could negatively impact consumers. We will continue urging our colleagues on both sides of the aisle to stand together to protect the integrity of our nation’s most crucial information network.”

Last week, the FCC’s rule repealing net neutrality was published in the Federal Register, leaving 60 legislative days to seek a vote on the Senate floor on the CRA resolutions. In order to force a vote on the Senate resolution, the Senators will submit a discharge petition, which requires a minimum of 30 Senators’ signatures. Once the discharge petition is filed, Senate Democrats will demand a vote on the resolution. A simple majority of 51 votes is needed to pass a CRA resolution in the Senate. 

A copy of the CRA resolution can be found here.

 

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WASHINGTON — U.S. Sen. Mark R. Warner (D-VA), Vice Chairman of the Senate Select Committee on Intelligence, issued the following statement regarding press reports that the Trump Administration is considering building a nationalized 5G network:   

“While I’m glad that the Trump Administration recognizes that maintaining American leadership in the information age requires a significant investment commitment, I’m concerned that constructing a nationalized 5G network would be both expensive and duplicative, particularly at a time when the Administration is proposing to slash critical federal investments in R&D and broadband support for unserved areas. America’s leadership in emerging fields like AI depends on supporting our nation’s research universities – and having an immigration system that attracts the brightest minds in the world – rather than rehashing old debates on construction of a standalone federal broadband network. I agree there are serious concerns relating to the Chinese government’s influence into network equipment markets, and I would look forward to working with the Administration on a viable, cost-effective solution to begin addressing those risks.”

A standalone network would cost more than $30 billion, according to previous estimates.

Sen. Warner spent 20 years as a successful technology and business leader in Virginia before entering public office. An early investor in the cellular telephone business, he co-founded the company that became Nextel. 

 

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WASHINGTON – U.S. Senators Jerry Moran (R-Kan.) and Mark Warner (D-Va.) – co-chairs of the Senate Aerospace Caucus – this week met with Aerospace Industries Association (AIA) President and Chief Executive Officer Eric Fanning, who was selected to lead the association effective January 1, 2018. In welcoming Mr. Fanning in his new capacity with AIA, Sens. Moran and Warner emphasized the caucus’s longstanding partnership with AIA and discussed collaborative ways to continue growing the aerospace industry as AIA prepares to celebrate its centennial anniversary.

“Our nation’s aerospace industry is driving innovation and pursuing cutting edge technologies, contributing both to U.S. national security and our economic competitiveness,” said Sen. Warner. “As Co-Chair of the Senate Aerospace Caucus, I look forward to working with my co-chair Senator Moran, the Aerospace Industries Association, and our manufacturers and suppliers on a range of critical issues, including workforce development, unmanned systems, increased R&D, defense modernization efforts, and ways to improve cybersecurity within these critical industries. Congratulations to Eric Fanning on his new position as President and CEO of AIA.”

“In Kansas – from cybersecurity to aircraft manufacturing and developing a talented workforce to maintain American supremacy – the aerospace industry has an impact on every corner of our state,” said Sen. Moran. “The aerospace industry is where a strong national defense and stable economy converge, and as co-chairs of the Senate Aerospace Caucus, Sen. Warner and I are committed to making certain that America’s defense, civil aviation and space sectors advance amidst global challenges. With extensive experience in the executive and legislative branches of our government, I know Eric shares this commitment, and I look forward to working with my caucus colleagues and industry leaders in safeguarding and promoting American innovation.” 

“I’m honored to be working once again with Senators Moran and Warner,” said AIA President and CEO Eric Fanning. “I’ve seen firsthand their commitment to the aerospace industry, the critical role it plays in our nation’s security, and the enormous impact it has on our economy.”

Items to note:

  • Fanning previously served as the 22nd Secretary of the Army, Chief of Staff to the Secretary of Defense, both Acting Secretary and Under Secretary of the Air Force, and has worked in the White House and on Capitol Hill.  

 

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WASHINGTON — U.S. Sens. Mark R. Warner (D-VA) and Elizabeth Warren (D-MA) introduced today the Data Breach Prevention and Compensation Act to hold large credit reporting agencies (CRAs)—including Equifax—accountable for data breaches involving consumer data. The bill would give the Federal Trade Commission (FTC) more direct supervisory authority over data security at CRAs, impose mandatory penalties on CRAs to incentivize adequate protection of consumer data, and provide robust compensation to consumers for stolen data.

In September 2017, Equifax announced that hackers had stolen sensitive personal information – including Social Security Numbers, birth dates, credit card numbers, driver’s license numbers, and passport numbers – of over 145 million Americans. The attack highlighted that CRAs hold vast amounts of data on millions of Americans but lack adequate safeguards against hackers. Since 2013, Equifax has disclosed at least four separate hacks in which sensitive personal data was compromised.

“In today’s information economy, data is an enormous asset. But if companies like Equifax can’t properly safeguard the enormous amounts of highly sensitive data they are collecting and centralizing, then they shouldn’t be collecting it in the first place,” said Sen. Warner. “This bill will ensure that companies like Equifax – which gather vast amounts of information on American consumers, often without their knowledge – are taking appropriate steps to secure data that’s central to Americans’ identity management and access to credit.”

“The financial incentives here are all out of whack – Equifax allowed personal data on more than half the adults in the country to get stolen, and its legal liability is so limited that it may end up making money off the breach,” said Sen. Warren. “Our bill imposes massive and mandatory penalties for data breaches at companies like Equifax – and provides robust compensation for affected consumers – which will put money back into peoples’ pockets and help stop these kinds of breaches from happening again.”

The Data Breach Prevention and Compensation Act would establish an Office of Cybersecurity at the FTC tasked with annual inspections and supervision of cybersecurity at CRAs. It would impose mandatory, strict liability penalties for breaches of consumer data beginning with a base penalty of $100 for each consumer who had one piece of personal identifying information (PII) compromised and another $50 for each additional PII compromised per consumer. To ensure robust recovery for affected consumers, the bill would also require the FTC to use 50% of its penalty to compensate consumers and would increase penalties in cases of woefully inadequate cybersecurity or if a CRA fails to timely notify the FTC of a breach.

The Data Breach Prevention and Compensation Act is supported by cybersecurity experts and consumer groups:

“U.S. PIRG commends Senators Warren and Warner for the Data Breach Prevention and Compensation Act. It will ensure that credit bureaus protect your information as if you actually mattered to them and it will both punish them and compensate you when they fail to do so,” said U.S. PIRG Consumer Program Director, Ed Mierzwinski.

"This bill establishes much-needed protections for data security for the credit bureaus. It also imposes real and meaningful penalties when credit bureaus, entrusted with our most sensitive financial information, break that trust," said National Consumer Law Center staff attorney, Chi Chi Wu. 

"Senator Warner and Senator Warren have proposed a concrete response to a serious problem facing American consumers,” said Electronic Privacy Information Center President, Marc Rotenberg.

"This bill creates greater incentive for these companies to handle our data with care and gives the Federal Trade Commission the tools that it needs to hold them accountable,” said Director of Consumer Protection and Privacy at Consumer Federation of America, Susan Grant.

Sen. Warner has been a leader in calling for better consumer protections from data theft. Following the Equifax data breach, Sen. Warner asked the Federal Trade Commission (FTC) to examine whether credit reporting agencies such as Equifax have adequate cybersecurity safeguards in place for “the enormous amounts of sensitive data they gather and commercialize.” He slammed the credit bureau for its cybersecurity failures and weak response at a Banking Committee hearing with Securities and Exchange Commission (SEC) Chairman Jay Clayton last year. Similarly, in the aftermath of the 2013 Target breach that exposed the debit and credit card information of 40 million customers, Sen. Warner chaired the first congressional hearing on protecting consumer data from the threat posed by hackers targeting retailers’ online systems. Sen. Warner has also partnered with the National Retail Federation to establish an information sharing platform that allows the industry to better protect consumer financial information from data breaches.Warner, Warren Introduce Legislation to Hold Credit Reporting Agencies like Equifax Accountable for Data Breaches 

To view a fact sheet about the legislation, click here. The bill text can be found here.  

 

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WASHINGTON – U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) urged Federal Communications Commission (FCC) Chairman Ajit Pai to delay a planned December 14th vote to roll back net neutrality rules until an investigation can be completed into reports that internet “bots” – automated computer programs designed to pose as people – filed hundreds of thousands of comments to the FCC during the net neutrality policymaking process.

“A free and open Internet is vital to ensuring a level playing field online, and we believe that your proposed action may be based on an incomplete understanding of the public record in this proceeding,” the Senators wrote in a letter to Chairman Pai. “In fact, there is good reason to believe that the record may be replete with fake or fraudulent comments, suggesting that your proposal is fundamentally flawed.”

“Without additional information about the alleged anomalies surrounding the public record, the FCC cannot conduct a thorough and fair evaluation of the public’s views on this topic, and should not move forward with a vote on December 14, 2017,” the Senators continued.

“The FCC must invest its time and resources into obtaining a more accurate picture of the record as understanding that record is essential to reaching a defensible resolution to this proceeding,” the Senators concluded.

In addition to Sens. Warner and Kaine, the letter was signed by Sens. Maggie Hassan (D-NH), Jeanne Shaheen (D-NH), Sherrod Brown (D-OH), Bernie Sanders (I-VT), Ed Markey (D-MA), Catherine Cortez Masto (D-NV), Sheldon Whitehouse (D-RI), Tammy Duckworth (D-IL), Michael Bennet (D-CO), Richard Blumenthal (D-CT), Elizabeth Warren (D-MA), Gary Peters (D-MI), Patty Murray (D-WA), Amy Klobuchar (D-MN), Ron Wyden (D-OR), Tammy Baldwin (D-WI), Mazie Hirono (D-HI), Chuck Schumer (D-NY), Jack Reed (D-RI), Ben Cardin (D-MD), Dianne Feinstein (D-CA), Jeff Merkley (D-OR), Kirsten Gillibrand (D-NY), Angus King (I-ME), Al Franken (D-MN), and Cory Booker (D-NJ). 

The full text of the letter appears below. A copy of the letter is available here.

 

December 4, 2017

 

The Honorable Ajit Pai

Chairman

Federal Communications Commission

445 12th Street Southwest

Washington, DC 20554

 

Dear Chairman Pai:

 

We are deeply concerned by your recently released proposal to roll back critical consumer protections by dismantling the Federal Communications Commission’s (FCC) current net neutrality rules. A free and open Internet is vital to ensuring a level playing field online, and we believe that your proposed action may be based on an incomplete understanding of the public record in this proceeding. In fact, there is good reason to believe that the record may be replete with fake or fraudulent comments, suggesting that your proposal is fundamentally flawed.

 

To this end, we request a thorough investigation by the FCC into reports that bots may have interfered with this proceeding by filing hundreds of thousands of comments. Furthermore, an additional 50,000 consumer complaints seem to have been excluded from the public record in this proceeding, according to Freedom of Information Act (FOIA) requests filed by the National Hispanic Media Coalition.  Without additional information about the alleged anomalies surrounding the public record, the FCC cannot conduct a thorough and fair evaluation of the public’s views on this topic, and should not move forward with a vote on December 14, 2017. 

 

New York Attorney General Eric Schneiderman has spent the past six months conducting an investigation into the fraudulent comments, and found that “hundreds of thousands” of comments may have impersonated New York residents, a violation of state law. He further asserts that the FCC has not cooperated with requests for additional data and information. Data scientist Jeff Kao has also run an analysis of the public record, and estimates that over a million comments filed in support of repealing net neutrality may have been fake. These reports raise serious concerns as to whether the record the FCC is currently relying on has been tampered with and merits the full attention of, and investigation by, the FCC before votes on this item are cast. 

 

A transparent and open process is vitally important to how the FCC functions. The FCC must invest its time and resources into obtaining a more accurate picture of the record as understanding that record is essential to reaching a defensible resolution to this proceeding.  As a result, we are requesting that you delay your planned vote on this item until you can conduct a thorough review of the state of the record and provide Congress with greater assurance of its accuracy and completeness.  

 

Thank you for your immediate attention to this matter.

 

Sincerely,

 

 

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WASHINGTON – U.S. Sen. Mark R. Warner (D-VA) released the below statement on the Federal Communications Commission's plan to repeal net neutrality rules:

“The FCC Chairman has decided to move forward to repeal net neutrality rules without any plan in place to uphold longstanding open internet principles supported by both Democratic and Republican Administrations. I am deeply concerned that the FCC’s current plan would amount to a green light for potential anti-competitive practices by certain internet service providers, with the Chairman signaling the Commission’s unwillingness to protect consumers and small businesses from potential abuse.”

Today, U.S. Sens. Mark R. Warner (D-VA), Amy Klobuchar (D-MN) and Claire McCaskill (D-MO) led a group of 15 Senators in urging the Federal Election Commission (FEC) to take immediate action to improve transparency for political advertisements online. Today is the final day of a month-long comment period considering whether the FEC should update rules that currently exempt many online ads from the requirements applied to political ads that air on television and radio.

WASHINGTON, DC – U.S. Senator Amy Klobuchar (D-MN), Ranking Member of the Senate Rules Committee, U.S. Senator Mark Warner (D-VA), Vice Chairman of the Select Committee on Intelligence, and U.S. Senator John McCain (R-AZ), Chairman of the Senate Committee on Armed Services today introduced the Honest Ads Act to help prevent foreign interference in future elections and improve the transparency of online political advertisements.

 “Online political advertising represents an enormous marketplace, and today there is almost no transparency. The Russians realized this, and took advantage in 2016 to spread disinformation and misinformation in an organized effort to divide and distract us,” Senator Warner said. “Our bipartisan Honest Ads Act extends transparency and disclosure to political ads in the digital space. At the end of the day, it is not too much to ask that our most innovative digital companies work with us by exercising additional judgment and providing some transparency.” 

 “First and foremost this is an issue of national security – Russia attacked us and will continue to use different tactics to undermine our democracy and divide our country, including by purchasing disruptive online political ads. We have to secure our election systems and we have to do it now – the next election is only 383 days away,” Senator Klobuchar said. “This bipartisan legislation would help protect our democracy by updating our laws to ensure that political ads sold online are covered by the same rules as TV or radio stations – and make them public so Americans can see who is trying to influence them.”

 “In the wake of Russia’s attack on the 2016 election, it is more important than ever to strengthen our defenses against foreign interference in our elections,” said Senator McCain.“Unfortunately, U.S. laws requiring transparency in political campaigns have not kept pace with rapid advances in technology, allowing our adversaries to take advantage of these loopholes to influence millions of American voters with impunity. Our bipartisan legislation would address this serious challenge by expanding landmark campaign finance law to apply to internet and digital communications platforms that command a significant audience. I have long fought to increase transparency and end the corrupting influence of special interests in political campaigns, and I am confident this legislation will modernize existing law to safeguard the integrity of our election system.”

Russia attempted to influence the 2016 presidential election by buying and placing political ads on platforms such as Facebook, Twitter and Google. The content and purchaser(s) of those online advertisements are a mystery to the public because of outdated laws that have failed to keep up with evolving technology. The Honest Ads Act would prevent foreign actors from influencing our elections by ensuring that political ads sold online are covered by the same rules as ads sold on TV, radio, and satellite.

The Honest Ads Act enhances the integrity of our democracy by improving disclosure requirements for online political advertisements by:

  • Amending the Bipartisan Campaign Reform Act of 2002’s definition of electioneering communication to include paid Internet and digital advertisements.
  • Requiring digital platforms with at least 50,000,000 monthly viewers to maintain a public file of all electioneering communications purchased by a person or group who spends more than $500.00 total on ads published on their platform. The file would contain a digital copy of the advertisement, a description of the audience the advertisement targets, the number of views generated, the dates and times of publication, the rates charged, and the contact information of the purchaser.
  • Requiring online platforms to make all reasonable efforts to ensure that foreign individuals and entities are not purchasing political advertisements in order to influence the American electorate. 

Companion legislation to the Honest Ads Act is being introduced today in the House of Representatives by Reps. Derek Kilmer (D-WA), Mike Coffman (R-CO).

“The 2016 elections exposed glaring holes in our ability to police foreign intervention in US elections, and this bill is an appropriate, bipartisan disclosure remedy,” said Trevor Potter, president of Campaign Legal Center (CLC), and a former Republican Chairman of the Federal Election Commission. “Voters have a right to be fully informed about who is trying to influence their vote, particularly foreign powers whose motives are contrary to American interests. The Honest Ads Act gives voters, journalists, and law enforcement officers important tools to help root out illegal foreign activity. The transparency this bill aims to provide in the 2018 elections and beyond will protect and enhance the integrity of our elections, which are the most fundamental component of American self-governance.”

“Ensuring transparency and accountability remain encoded into our democracy in the 21st century has taken on new importance and relevance in the wake of the 2016 election. We hope this bill, which merits serious consideration, catalyzes an overdue public debate and substantive action in Congress and the Federal Election Commission to create platform parity for political ad disclosure across TV, radio, print and Internet companies. Opacity by design is not an acceptable status quo for the technology giants that shape public knowledge and discourse with limited accountability,” said Alexander B. Howard, Deputy Director of the Sunlight Foundation.

“The bipartisan introduction of the Honest Ads Act is an important step toward bringing American campaign finance law into the internet age, by ensuring that online political advertisements are subject to the same kind of disclosure rules that already exist for ads on television and radio,” said Lawrence Norden, Deputy Director of the Brennan Center’s Democracy Program. “At a time when hostile foreign powers are trying to exploit loopholes in our campaign laws to manipulate American elections, it is especially important for Congress to come together across partisan lines to strengthen our democracy.  The Brennan Center applauds Senators Klobuchar, Warner and McCain for reaching across partisan lines to introduce this significant bill.”

“Americans have a right to know who is using political advertising to influence their votes and their views. As technology changes and political advertising shifts to online platforms, our transparency laws should keep pace. The recent revelations of Kremlin-connected influence operations on Facebook and Twitter underscore how important it is for Congress to take meaningful action. The HONEST Act is a critical step forward in enhancing the transparency of online political advertising. Common Cause commends Senators Klobuchar, Warner and McCain for their strong bipartisan leadership in introducing this important bill to bolster the integrity of our democracy,” said Karen Hobert Flynn, President of Common Cause.

As Ranking Member of the Senate Rules Committee with oversight jurisdiction over federal elections, Klobuchar has introduced legislation to improve the security of U.S. election systems and make commonsense improvements to election administration. She and Senator Roy Blunt (R-MO) introduced the bipartisan Stop Foreign Donations Affecting Our Elections Act to strengthen disclosure by requiring federal campaigns to use existing credit card verification protocols to help verify that online credit card donations come from U.S. sources. Klobuchar and Senator Lindsey Graham (R-SC) also introduced bipartisan legislation to help states block cyber-attacks, secure voter registration logs and voter data, upgrade election auditing procedures, and create secure and useful information sharing about threats. In June, Klobuchar introduced the Helping State and Local Governments Prevent Cyber Attacks Act to help combat foreign interference by providing state and local governments with the information and resources they need to keep our elections secure and improve voter confidence. 

As vice chairman of the Senate Select Committee on Intelligence, Sen. Warner has been at the forefront of the Committee’s ongoing bipartisan counterintelligence investigation into Russian interference in the 2016 U.S. presidential election. Warner also is the co-founder of the Senate’s bipartisan Cybersecurity Caucus. In addition, Sen. Warner is working to finalize bipartisan legislation to create a comprehensive, nationwide and uniform data breach standard, requiring timelier consumer notification for breaches of financial data and other sensitive information, and setting national data-protection standards for companies handling sensitive personal information.  

Senator McCain has been a champion of campaign finance reform for decades. As a lead author of the Bipartisan Campaign Reform Act of 2002, he has long advocated of transparency in the American electoral process.  

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WASHINGTON – U.S. Sen. Mark R. Warner (D-VA), a member of the Banking, Budget and Finance committees and cofounder of the bipartisan Senate Cybersecurity Caucus, today asked the Federal Trade Commission to examine the recent cyber hack of credit reporting agency Equifax. Last week, Equifax publically disclosed a breach which exposed sensitive personal information of 143 million Americans.

Sen. Warner requested an FTC investigation into the lapse in Equifax cybersecurity practices, and questioned the company’s widely-panned response to consumers potentially impacted by the breach. His letter asks the FTC to examine whether credit reporting agencies such as Equifax have adequate cybersecurity safeguards in place for “the enormous amounts of sensitive data they gather and commercialize.” 

Sen. Warner has been a leader in calling for better consumer protections from data theft. In the aftermath of the Target breach that exposed the debit and credit card information of 40 million customers, Sen. Warner in 2014 chaired the first congressional hearing on protecting consumer data from the threat posed by hackers targeting retailers’ online systems. Sen. Warner also partnered with the National Retail Federation to establish an information sharing platform that allows the industry to better protect consumer financial information from data breaches.

Sen. Warner has been working to develop bipartisan legislation to create a comprehensive, nationwide and uniform data breach standard requiring timely consumer notification for breaches of financial data and other sensitive information. 

The text of the letter is below and can be found here

September 13, 2017

 

The Honorable Maureen K. Ohlhausen

Acting Chairwoman

Federal Trade Commission

600 Pennsylvania Avenue, NW

Washington, D.C. 20580

 

Dear Acting Chairwoman Ohlhausen,

 

I write you in the wake of reports that one of the nation’s three major credit reporting agencies has suffered one of the largest, and potentially most impactful, breaches in recent history. According to reports, Equifax in May of this year experienced a breach affecting as many as 143 million consumers, with highly sensitive information such as Social Security numbers, driver’s license records, birthdates, addresses, and credit histories potentially at risk. This information – critical to opening a new bank account or taking out a loan – will expose Americans to identity theft, tax fraud, extortion, and other risks.

 

By streamlining and routinizing the collection of consumer reports and credit history, the Fair Credit Reporting Act in part enshrined the nation’s major credit reporting agencies’ role as arbiters of Americans’ access to credit, and even employment and residential opportunities. At the same time, Congress sought to ensure that these firms “exercise their grave responsibilities” with a “respect for the consumer’s right to privacy,” including through “reasonable procedures…with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information[.]”  And Congress directed the Federal Trade Commission (“Commission” or “FTC”) to enforce key aspects of the law, including by treating violations of the FCRA as unfair or deceptive practices under the Commission’s Section 5 authority. 

 

Today’s digital economy, in which data increasingly represents a key input, has only amplified the reach of these firms, and provided them with incentives to collect and centralize ever-growing amounts of sensitive personal information, and to commercialize this data in opaque ways. The volume and sensitivity of the data potentially involved in this breach raises serious questions about whether firms like Equifax adequately protect the enormous amounts of sensitive data they gather and commercialize. 

 

As someone who has worked for several years with stakeholders and a bipartisan group of lawmakers on legislation to establish a comprehensive, nationwide and uniform data breach standard, I recognize Congress’s unfinished work in this area. I am hopeful that this recent development will help galvanize action among my colleagues in Congress to safeguard American consumers and our nation’s economic security.

 

At the same time, aspects of this breach raise questions about the data security practices of Equifax that implicate the Federal Trade Commission’s existing authority. In particular, press reports and cybersecurity experts have identified a number of security lapses, including in the days following Equifax’s disclosure of the breach, that potentially indicate a pattern of security failings.

 

While the precise details of the “website application vulnerability” exploited in the Equifax breach are not yet known, experts have pointed to a wide range of other lapses by Equifax – including in the wake of the breach – that indicate exceptionally poor cybersecurity practices. For instance, experts have pointed to an exceedingly broad attack surface, with thousands of domains and subdomains managed by Equifax across hundreds of network hosts. And security experts have identified a range of antiquated, unpatched, or otherwise vulnerable systems maintained by Equifax.

 

Equifax’s post-breach actions also raise serious concerns about the company’s data security practices. For instance, Equifax chose to register a new domain, Equifaxsecurity2017.com – but not in its own name. Reports also catalogued a litany of security mistakes, including use of potentially insecure content management software and improperly configured web encryption.  These, and other lapses, resulted in a range of popular web browsers flagging Equifax’s site as a potential phishing or scam site. 

 

Equally alarming have been Equifax’s procedures for handling customer inquiries. In order for a concerned consumer to determine if they may have been impacted, Equifax requires the consumer to submit their last name and six digits of their Social Security number. The security of this procedure is as questionable as its efficacy: researchers noted that entering the last name “Test” and the Social Security numbers “123456” returned a confirmed breach.

 

Similarly alarming, when concerned consumers elect to place a credit freeze with Equifax – something the Commission encourages them to do – the PIN that Equifax assigns to that consumer is a simple, non-unique timestamp (formatted as, for instance, “0910170930” for a user that submitted a request at 9:30AM on the 10th of September). Separately, experts have noted that Equifax’s central website, where American consumers go to set up credit account monitoring, features cross-site scripting vulnerabilities that would enable an attacker to execute malicious code to, for instance, redirect submitted form data (such as the Social Security number the Equifax site requests) to an attacker. 

 

Taken as a whole, and given past breaches by other major credit bureaus, these lapses may potentially represent a systemic failure by firms currently incentivized to collect and store highly sensitive identification and financial data for Americans. The volume and sensitivity of the data involved – information critical to identity management and access to consumer credit – distinguishes this breach from many other breaches of consumer data. And in contrast to other breaches, where consumers might respond to the perceived lack of data security by taking their business elsewhere, those affected by last week’s breach in most cases do not have a direct consumer relationship with Equifax.

 

The implications of a breach of this magnitude are sobering, as this identifying data forms the basis for consumer credit and other financial transactions. Congress foresaw this threat in 1970, noting that failures of this industry could “undermine the public confidence which is essential to the continued functioning of the banking system.”  In ways similar to the financial service industry’s systemic risk designation, I fear that firms like Equifax may illustrate a set of institutions whose activities, left unchecked, can significantly threaten the economic security of Americans.

 

I respectfully request that you respond to the following questions:

 

  1. 1.      Equifax is currently under a consent decree with the Commission for violations of the Fair Credit Reporting Act related to improper handling of consumer information.  Does that consent decree provide the Commission with additional remedies in the context of Equifax’s data security practices? 

 

  1. 2.      Given the current inability of consumers to cease doing business with a credit reporting agency which displays an arguably cavalier attitude toward cybersecurity, should the Fair Credit Reporting Act be amended to provide the Commission authority to issue rules requiring credit reporting agencies to establish a way for consumers to “opt out” of having their information stored by a particular credit reporting agency? 

 

  1. 3.      In many cases, Equifax collects and maintains sensitive information about consumers as a service to other businesses. Under state data breach notification statutes, a breached service provider need only inform the business it provides service to about the breaches it suffers, and has no obligation to provide public notice that it incurred the breach. In recent breach incidents involving third-party service providers, some companies (e.g., Heartland, Experian, Anthem, etc.) have provided public notice that their breach affected consumers. Would the FTC support legislation that requires all entities suffering a breach of security that creates a significant risk of financial harm, to make public notice of that breach in order to ensure a more timely and effective form of notice? 

 

  1. 4.      Do you interpret the Fair Credit Reporting Act to include heightened data security standards and/or requirements, given Congress’s unique concern about the “confidentiality, accuracy…and proper utilization” of this highly sensitive data? 

 

  1. 5.      The Commission has suggested that consumers place a credit freeze with the three major credit bureaus.  Does the Commission consider a timestamp to be a sufficiently strong PIN for unfreezing a consumer’s account?

 

  1. a.      Has the Commission issued guidance to credit reporting agencies on adequate security and data protection measures associated with credit freezes? 
  2. b.      Should this guidance be updated in light of security concerns with the site Equifax maintains to process credit monitoring and freeze requests?

 

  1. 6.      Should Congress limit the ability of credit reporting agencies to sell data outside specific contexts, such as credit, banking, and employment inquiries?

 

  1. 7.      Does the Commission hold lapses in data security practices in response to a breach to a higher standard than data security practices related to the breach itself?

 

  1. 8.      Do adequate incentives to use reasonable data security practices, or penalties to deter unreasonable data security practices, exist to counter-balance the profit incentives to collect, centralize, and maintain large quantities of highly sensitive personal information of American consumers?

 

The American people deserve to know that their government is serious about learning from and responding to this truly concerning incident, and that it is taking all appropriate steps to help ensure it cannot happen again. Your response will be critical to this process, and I look forward to receiving that within the next two weeks. If you should have any questions or concerns, please contact my office.

 

As always, I appreciate your service in this important role. Thank you for your timely consideration of this matter.

 

Sincerely,

 

 

MARK R. WARNER

United States Senator 

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Sen. Warner Pushes FTC to Protect Children's Data Security with Internet-connected “Smart Toys”

In second letter to agency, Warner highlights high-profile examples of smart toys that have jeopardized privacy of children and their parents

May 22 2017

U.S. Sen. Mark R. Warner (D-VA) today sent a letter to the Federal Trade Commission (FTC) asking the agency about its efforts to protect children’s privacy following several high-profile instances of children’s data being hacked.