Companies To Be Liable For Deals With Online Criminals

Dionysius, God of Wine and Leaf, sends us to DarkReading for a backgrounder on new rules from the FTC, taking effect in November, that will require any business that handles private consumer data to check its customers and suppliers against databases of known online criminals. Companies that fail to do so may be liable for large fines or jail time. In practice, most companies will contract with specialist services to perform these checks. Yet another list you don't want to get on. "The [FTC's] Red Flag program... requires enterprises to check their customers and suppliers against databases of known online criminals — much like what OFAC [the Treasury Department's Office of Foreign Asset Control] does with terrorists — and also carries potential fines and penalties for businesses that don't do their due diligence before making a major transaction."

Hm..

Does the crime of Slashdot first-posting get you on that list?

Onerous Burden on Businesses?

This sounds like quite an onerous burden on businesses, and I imagine it will be struck down by the courts soon enough unless it's much narrower and specific a regulation than the story makes it appear. Private parties should not be expected to do the job of law enforcement.

Re:Onerous Burden on Businesses?

Well fortunately, online criminals have no way of pretending to be someone else so it should be a relatively painless procedure for businesses to check their identities.

Re:Onerous Burden on Businesses?

Well fortunately, online criminals have no way of pretending to be someone else so it should be a relatively painless procedure for businesses to check their identities.

A solution's effectiveness is a tertiary concern for a government agency when addressing a problem. The agency's primary concern is to increase its own power. The secondary concern is to receive public approbation by doing something very visible. A "no-fly list" like this one is the perfect implemention of an agency's two main goals.

That's only 90% crazy though. Sometimes, the function of law-enforcement is just to remind everyone that law enforcement exists. After all, whether any random soul will cross the line from dove to hawk mostly depends his assessment of law enforcement's effectiveness. Therefore, an appearance of effectiveness is often just as good as actual effectiveness.

But not in this case. The bad guys know exactly how to beat the list (fake or stolen credentials) and they can even test whether they've succeeded. Therefore, this "no-fly list" creates a false sense of security, which means that people will be overall less safe.

Re:Onerous Burden on Businesses?

This sounds like quite an onerous burden on businesses, and I imagine it will be struck down by the courts soon enough unless it's much narrower and specific a regulation than the story makes it appear. Private parties should not be expected to do the job of law enforcement.

It depends on how easy it is to do. I think for the most part, businesses that will be affected by this will probably want to insure that they are not helping criminals. I know I can speak for our business.

Plus, this thing kinda reminds me of the Payment card industry standard which, among other things, requires business that accept credit and bank cards to adhear to a strict policy of security when dealing with these cards. Every year, even on the smallest level, companies should be filling out a "self test" which requires you answer questions about your card security. Among the questions is a whole bunch of requirements you'd expect of a data center but not, say, a restaurant. Glass walls, biometric access, camera systems, etc. Fines start at $100,000 and you risk losing your ability to take credit cards. The published standard is here. [pcisecuritystandards.org]

I'm sure that 99% of small businesses that accept Visa/MC/AMEX etc have *no idea* about this standard and even if they did, they have no resources to adhear to it. That's why this "Red Flag" deal reminds me of it.

I'm doing business with Mastercard

Mastercard is the one doing actual business with terrorists... why aren't THEY responsible for this "small" fee?

Re:

I think if you read the actual proposed regulation that's published at http://www.ftc.gov/ [ftc.gov] you'll see that that's exactly what happens. This regulation does not appear to apply to businesses who merely accept credit cards, but rather to those who issue cr

Re:Yes they are

We are also running headlong into an age of "lifelong punishment," where 50 year old men are denied needed services because of a crime they commited when they were 19 and drunk, and which they would not commit now that they have grown up. This sort of thing is happening *today*, is utterly unjust, and will only get worst if we continue with this sort of personal data tracking.

This is where a pardon is supposed to come in. Pardons aren't just for the wealthy and the connected. They're also for the 30-year-olds who did something stupid at 19 while drunk, paid their dues (fines, revocation of privileges such as driver's license, and/or jail time) and haven't had a criminal charge since. A successful pardon application, which may take a year or two to process, should also automatically (I hope!) remove your name from all criminal registries, including sex offender registries (though I imagine that these would be harder to get pardons for).

Ok, maybe I'm dreaming...

Is rootkit Sony on the list?

No? How about forged packet Comcast? No again? What about exposing most of the internet to id theft and cross site scripting Barefruit? Not a very thorough list, is it?

Re:

Exactly. The FTC needs to clearly define the penalties for doing business with "criminals". If I do business with Comcast (presumably, a known criminal entity) just what, exactly, am I liable for? Can I still buy a Sony PS3, or will there be additional f

Maybe not such a great idea

At first this sounds like an incentive for businesses not to conduct transactions with criminals. Take identity theft, for example. I don't want vendors consorting with thieves, should somebody steal my credit card info. But how should vendors know it's a thief and not me? It's not reasonable.

Worst case scenario: this turns out to be another vague No-Fly list that persecutes the innocent while doing little to no actual good. In any case, it will be more work and more liability for vendors.

Jail?

Companies that fail to do so may be liable for large fines or jail time

They're going to put whole companies in jail?

But at any rate, after Sony's criminal rootkit vandalism of millions of computers, I'm going to have to see a CEO in shackles before I believe it. And Martha Stewart doesn't count.

For those of you unfamiliar with Sony's evil, deliberate vandalism, here are two links:
serious [wikipedia.org]
content-free [uncyclopedia.org]

EU Export

To my knowledge, European Union regulations already require you to check the people to whom you are shipping goods, to see if they are on a list of known terrorists and their associates.

Does that include the government itself?

Or are we only counting criminals that aren't considered above the law?

Your papers, please...

I remember a common threat in grade school was "this will be on your permanent record". We used to joke about it - it seemed ridiculous.

As an adult, it's starkly clear to me that "permanent records" do exist for all of us, and they control our lives to a large degree. Credit reports, "no-fly" lists, and now this "red flag" list - somewhere out there grim people in small offices quietly compile lists of citizens whom they feel should be "less free".

What kind of oversight exists for this list? What does one have to do (or not do) to appear on it? If you're on it, how can you be removed?

I wish I could say I was surprised by this new step towards an Orwellian dystopia, but the past several years have numbed me to it.

Who does this apply to?

The FTC page that the original article links to

http://www.ftc.gov/opa/2007/10/redflag.shtm [ftc.gov]

Only talks about financial institutions and creditors. It doesn't seem to indicate that Mary's Online Potpourri Barn has to do a background check on everybody that orders a lemon scented candle.

Re:

holy flying c-notes batman.... The financial institutions and creditors ARE the criminals. How the hell is that supposed to work?

Re:

You're exactly right. This article is obviously little more than a regurgitated press release for MicroBilt. The reality is that this law is intended for big companies and companies doing big money deals and they're the only ones that are going to have to

Why aren't these "known criminals" in jail?

This seems like some kind of backdoor conviction without a trial. If the government "knows" these people are criminals, why haven't they been arrested, convicted, and sentenced? If the government is forbidding people to do business with these people, shouldn't they have a trial or some kind of public hearing where the facts are presented?

This kind of thing seems like it could lead to rampant abuse, or at least error if someone winds up on one of these lists that shouldn't be on it.

Re:Why aren't these "known criminals" in jail?

If they have served their time, why are we preventing them from integrating back into society?

This will be the year of the Linux desktop

... because nobody will be able to do business with Microsoft. They are convicted in Europe.

I don't get it.

1. Inocent until proven guilty. So why should there be a black list of people who havn't been threw justice system.

2. Rights after you serve your time. So if the person was an online criminal and served his/her time. Is is really reasonable to block them for using the inernet ever again, espectially in a world with increasing demmand to use the internet for daily communication and comerse.

3. People on probation is such a small portion of a list that the forced blacklist is an undue burden.

4. These people are criminals... They have been proven to be untrustworthy, what makes it so they don't lie on an online form or use someone elses idenity.

5. Small ISP and companies don't have resources to do this. a 10-15k project for a big company is a drop in the bucket for for a small ISP it is a huge undertaking, which could kill it.

6. Why punish honest/trusting people. America's growth was based on contract by handshake. There are a lot of companies that still want to keep that type additude. But laws like this make it so you need a lawer for everthing... (on a side note why the hell do we keep electing lawers into government)

7. In a slumbing echonomy is it prudent to make it difficult for people to do business.

8. If it forces criminals to be smarter and hide their tracks more, doesn't it make it more difficult for authorities to track such people.

9. If the criminals cannot work online they will still be criminals and be on the street with guns and drugs.

10. What happends if your name matches a criminal.

Does not fly - will increase ID theft.

The "Do Not Fly" list already has shown how well false positives work - it's caused trouble for people who are wrongly put onto the list. Those with particularly common names will have particular trouble.

Unless there's a swift and clear grievance system, this will cause so many false positives that positives will be worked around. And who says that any bad people wouldn't steal or set up identities under which to do business?

The end result in three years? There will be lots of news about false positives, and the bad guys will just use more ID theft. Which will put those with stolen IDs into still more of a mess.

I don't think that this passed the "run it by a six-year-old first" test.

At last, a list I want to be on

It appears to me that if I get on that list it will greatly reduce my exposure to Identity Theft.

Re:

Bad form... replying to self... get over it.

Not paying enough attention, I missed this link [ftc.gov] from TFA. This notice is all about identity theft, while the summary indicates that companies will be required to check customer lists against known criminals.

If s