Consumer Protection - Security Questions and Measures
Impact
If enacted, SB862 would amend the Maryland Commercial Law to classify violations of this act by businesses and nonprofits as unfair, abusive, or deceptive trade practices. This classification would subject violators to penalties under the Maryland Consumer Protection Act, thereby reinforcing safeguards around consumer data and pushing entities to adopt more secure practices in handling sensitive personal information. The bill also allows individuals to report violations by government entities to the Division of Consumer Protection, fostering greater accountability.
Summary
Senate Bill 862, titled 'Consumer Protection - Security Questions and Measures', seeks to enhance the security of customer information by prohibiting the use of specific personal identifiers—in this case, the maiden name of a customer's mother—as a means of safeguarding access to their accounts. The bill primarily targets businesses, nonprofit entities, and units of state and local government, aiming to prevent them from using such identifiers that may compromise consumer privacy and security.
Contention
Notably, while the bill has garnered support for its consumer protection initiatives, it may also spark discussions regarding the balance between privacy and operational practices of organizations. Some stakeholders might argue that the prohibition of using maiden names as security questions could impede certain operational processes, particularly for financial institutions which are traditionally reliant on various forms of personal data for identity verification. Consequently, it might raise questions about how organizations can adapt to these new requirements without sacrificing security measures.
Prospective_application
The bill is set to take effect on June 1, 2023, and is designed to apply prospectively, meaning it will not affect any customer accounts established before January 1, 2024. This stipulation aims to give entities time to adjust their practices in compliance with the new regulations, thereby providing a smoother transition to enhanced consumer protections.