Cost Implications of Privacy Protection in Databank Systems.

The Privacy Act of 1974 and other pending legislation codify the rights of citizens relative to their personal information stored in computerized databank systems, and assure that privacy and other individual rights are not violated or unduly restricted. This paper categorizes the proposed safeguards, examines alternative implementations and discusses the cost implications. The analysis indicates: (1) In most cases, notification requirements can be met in the course of regular communications with data subjects. (2) Extra personnel and facilities will be required to meet inspection requests and enforce internal procedures. (3) Transaction logs must be set up and maintained. (4) New data fields will be required for supplemental information or rebuttal statements. (5) Computer time and storage space will be needed for implementing access-control procedures. The experience with implementation of privacy protection requirements of the Fair Credit Reporting Act shows that these costs tend to be relatively minor when compared to the routine operating costs of databank systems. 25 pp. Ref.