A bill recently introduced in the U.S House of Representatives would force mutual fund complexes and other financial services companies to improve the security of sensitive financial consumer data, and perhaps even require them to provide free data monitoring to investors whose information has been breached.

The Financial Data Protection Act of 2005 seeks to prevent data breaches by mandating a strong national standard for the protection of sensitive consumer information. It would require institutions to notify consumers if their information has been compromised and could be used by identity thieves and, upon notification of a breach, require institutions to provide consumers with a free six-month nationwide credit monitoring service.

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