What Is Personally Identifiable Information (PII)?

In today’s increasingly digital world, our online activities leave a trail of personal information that is collected, processed, and shared by organizations, companies, and even malicious individuals. This data, known as Personally Identifiable Information (PII), has become a valuable commodity, often used for marketing or identity verification. Alarmingly, in 2023, more than 52% of all data breach incidents globally involved the exposure of customer PII, making it the most frequently breached type of data. This highlights the increasing vulnerability of sensitive personal information in today’s digital landscape. Therefore, it is crucial to understand what constitutes PII and take appropriate measures to protect it.

What Is Personally Identifiable Information (PII)?

What Are Examples of Personally Identifiable Information (PII)?

Common examples of personally identifiable information (PII), include:

• Identifiers: Names, social security numbers, passport numbers, driver’s licenses, financial account numbers.
• Contact Information: Addresses, email addresses, phone numbers.
• Location Data: IP addresses, GPS location.
• Biometric Data: Fingerprints, facial recognition, voice data.
• Health Information: Medical records, health insurance details.
• Financial Information: Bank account numbers, credit card information.

What Are the Two Types of Personally Identifiable Information (PII)?

Personally Identifiable Information (PII) can be categorized into two primary types: sensitive PII and non-sensitive PII. The key distinction between the two lies in their varying levels of sensitivity and the potential risks associated with their exposure or misuse.

1. Sensitive PII

Sensitive PII encompasses highly confidential information that, if compromised, can lead to significant harm. Examples include Social Security numbers, financial account details, biometric data, medical records, and the PII of minors. The exposure of such data can result in identity theft, financial fraud, and other severe consequences.

2. Non-sensitive PII

Non-sensitive PII typically includes information readily available to the public, such as contact details, names, educational backgrounds, and demographic data. Although generally considered less risky than sensitive PII, it’s essential to protect non-sensitive PII to maintain individual privacy and prevent misuse.

How Is Personally Identifiable Information (PII) Collected?

Collecting Personally Identifiable Information (PII) is essential for various business and personal transactions, but it also introduces significant privacy and security risks. PII can be collected in several ways, including:

1. Directly From Individuals

PII is often provided directly by individuals through various channels such as online forms, face-to-face interactions, phone calls, social media accounts, and paper forms.

2. Through Online Activities

As people engage online—interacting on social media, browsing websites, and making purchases—they leave behind a digital footprint. This footprint includes IP addresses, browsing history, login credentials, email addresses, phone numbers, and payment and shipping information.

3. From Surveillance Cameras

Surveillance cameras located in public spaces or business premises capture PII in the form of images, location data, and timestamps.

4. From Public Records

Governments collect and maintain PII through public records for social and legal purposes, such as improving social services or fulfilling legal obligations. This includes court records, voter registration lists, and property records, which contain details like names, addresses, birthdates, criminal records, marriage certificates, property ownership, and employment history.

5. From Devices and Sensors

Smartphones, wearable technology, and Internet of Things (IoT) devices collect PII, including activity data, location information, and biometric details.

6. From Third-Party Sources

Data brokers collect, transform, package, and sell personal data obtained from various sources.

7. From Unethical Hackers

Hackers can use spyware, viruses, backdoors, social engineering, or other methods to steal PII from individuals, companies, governments, and other organizations.

What Is PII used for?

Personally Identifiable Information (PII) plays a crucial role in various aspects of modern life, serving multiple purposes across different sectors:

1. Identity Verification: Financial institutions and other organizations use PII to verify their customer’s identities during Know Your Customer (KYC) processes. This is important for complying with anti-money laundering (AML) regulations and preventing terroism financing and other financial crimes.
2. Personalized Marketing: Businesses leverage PII to tailor their offerings to individual users and target marketing efforts more effectively. By analyzing PII, companies can deliver personalized experiences and advertisements that resonate with specific audiences.
3. Business Operations: Many organizations rely on PII to manage day-to-day operations and deliver services to customers. This includes everything from customer relationship management to service provision and support.
4. Healthcare: Healthcare providers collect and use PII to manage patient records, provide treatment, and bill insurance companies.
5. Employment: Employers use PII to verify the identities of job applicants and conduct background checks. PII is also essential for managing employee records, payroll, and benefits administration.
6. Government Services: Governments utilize PII to provide citizens with essential services such as passports, driver’s licenses, and social security cards. PII is crucial for verifying identities, determining eligibility, and administering social benefits.
7. Law Enforcement: PII such as fingerprints, DNA, and surveillance data is used in criminal investigations to identify and track suspects, playing a critical role in solving crimes and ensuring public safety.
8. Education: Educational institutions use PII to manage students’ academic records, track progress, and provide necessary educational services.
9. Research: Researchers may collect PII as part of studies or surveys, particularly in fields that require tracking individual responses or outcomes over time.

Consequences of PII Falling Into the Hands of Criminals

The widespread collection and use of Personally Identifiable Information (PII) have become integral to our digitally-driven society. However, when PII falls into the hands of malicious actors, it can lead to severe consequences, including:

• Misuse of Data: Criminals can exploit PII to obtain prescription drugs, claim benefits, file false tax returns, travel across international borders, receive medical treatment, seek employment, and engage in other fraudulent activities.
• Personal and Professional Harm: These exploitations can cause significant damage, including embarrassment, inconvenience, reputational harm, emotional distress, financial loss, and even risks to personal safety. Innocent individuals may be wrongly arrested or charged, while professionals like pharmacists and doctors could suffer irreparable reputational harm. Additionally, individuals may face suspension or termination of benefits, and organizations could suffer from public trust loss, legal liabilities, or costly remediation efforts.
• Escalating Data Breaches: The scale of this issue is highlighted by a 2023 report from the Identity Theft Resource Center, which revealed a record high in data breaches. The report noted a 14% increase over the previous record, resulting in 733 compromises that affected more than 66 million victims. This alarming trend underscores the urgency for individuals and organizations to adopt robust measures to protect PII from falling into the wrong hands.

The consequences of compromised PII can be far-reaching, affecting not only the individuals whose information is stolen but also the broader systems and institutions that rely on trust and security.

Effective Strategies for Securing Personally Identifiable Information (PII) in Organizations

In today’s data-driven world, it’s essential for organizations to prioritize the protection of Personally Identifiable Information (PII) to safeguard individuals’ privacy and prevent potential data breaches. Here are some best practices for effective PII management:

• Identify All PII: Conduct a comprehensive audit of all personal information within your organization’s possession. This includes databases, shared networks, drives, backup tapes, and contractor sites where PII may be stored.
• Limit Use and Retention: Only collect, use, and retain PII that is necessary to achieve specific business goals. Avoid accumulating excessive or irrelevant personal data.
• Categorize PII by Impact Level: Classify PII based on its impact level—low, moderate, or high. This classification should reflect the potential harm to individuals and the organization if the data is accessed, used, or disclosed without authorization.
• Apply Appropriate Safeguards: Implement security measures proportional to the PII’s confidentiality impact level. Higher sensitivity data should have more robust protection.
• Develop an Incident Response Plan: Establish a clear, actionable plan to respond to data breaches involving personal information. This plan should outline steps to mitigate damage and communicate with affected parties.
• Coordinate Among Relevant Experts: Encourage collaboration among IT, legal, and compliance teams to ensure comprehensive protection of PII.
• Provide Ongoing Training and Education: Raise awareness about the importance of PII protection and the organization’s policies through continuous training programs for staff.
• Manage Vendors and Third-Party Service Providers: Implement strict policies and procedures for managing vendors and third-party service providers that handle PII. Ensure these partners adhere to the same standards of data protection.
• Ensure Legal Compliance: Adhere to all applicable laws and regulations governing personal information, such as GDPR or CCPA, to avoid legal penalties and protect consumer trust.

Online Steps to Protect Your Personally Identifiable Information (PII)

Protecting PII online is crucial to minimizing the risk of data breaches, identity theft, fraud, and other cybercrimes. Here are some key strategies:

• Use Strong Authentication: Employ unique and strong passwords for all accounts and devices. Whenever possible, enable Two-Factor Authentication (2FA) for an added layer of security.
• Secure Your Devices: Implement strong security measures like firewalls, antivirus software, and regular software updates. Avoid using public Wi-Fi networks for sensitive activities, such as online banking or accessing confidential information.
• Be Mindful of What You Share: Exercise caution when sharing PII online or offline. Only provide it to trusted sources for legitimate purposes. Avoid sharing sensitive information, such as social security numbers or financial details, unless absolutely necessary.
• Control Data and Privacy Settings: Pay attention to the PII you disclose online and the permissions granted to apps and websites. Review privacy policies before providing information, and opt out of data collection or sharing when possible to limit exposure.
• Stay Informed: Keep yourself updated on the latest online threats, scams, and best practices for protecting PII. Follow reliable sources, such as reputable security websites or government agencies, to stay informed and protected.

Regulations Governing PII Data Protection

Organizations handling Personally Identifiable Information (PII) must comply with a complex web of domestic and international laws. Key regulations include:

• The Privacy Act of 1974: This U.S. federal law governs the collection, maintenance, use, and dissemination of PII by federal agencies. It establishes stringent guidelines to protect individual privacy.
• OMB Memoranda: The Office of Management and Budget (OMB) issues memoranda providing detailed instructions to federal agencies on PII management and protection, often addressing emerging threats and technologies.
• The Health Insurance Portability and Accountability Act of 1996 (HIPAA): Designed for the healthcare industry, HIPAA mandates the protection of sensitive patient information, ensuring confidentiality and security, especially for electronic data.
• The Gramm-Leach-Bliley Act (GLBA): This U.S. law requires financial institutions to disclose information-sharing practices to customers and implement robust safeguards to protect sensitive data.
• The California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA): These California laws empower residents with control over their personal information collected by businesses. The CPRA, an expansion of the CCPA, introduced stricter data protection measures and established the California Privacy Protection Agency (CPPA) as the enforcement body.
• General Data Protection Regulation (GDPR): GDPR mandates stringent data protection measures for companies processing personal data of EU citizens. Individuals have extensive rights over their data, including access, correction, and deletion.
• UK Data Protection Act 2018: The UK’s post-Brexit data protection law aligns closely with the GDPR, ensuring lawful, fair, and transparent processing of personal data.

Conclusion 

The importance of safeguarding Personally Identifiable Information (PII) cannot be overstated. PII enables personalized experiences and services but also presents significant risks if mishandled or exposed. As data breaches become more frequent, protecting PII is not just a legal obligation but a critical aspect of maintaining trust in the digital ecosystem.

Organizations must adopt rigorous security protocols, remain transparent about their data practices, and comply with privacy regulations to protect individuals’ sensitive information. Likewise, individuals must stay informed and proactive in managing their digital footprints. By collectively prioritizing the protection of PII, we can foster a safer, more secure digital environment for everyone.

Identity.com

One of our pursuits as an identity-focused company is a user-centric internet, where users have control over their PII. More reason why Identity.com doesn’t take the back seat in contributing to this future via identity management systems and protocols, which will provide better collection and protection of PII from users. We also belong to the World Wide Web Consortium (W3C), the standards body for the World Wide Web.

The work of Identity.com as a future-oriented company is helping many businesses by giving their customers a hassle-free identity verification process. Identity.com is an open-source ecosystem providing access to on-chain and secure identity verification. Our solutions improve the user experience and reduce onboarding friction through reusable and interoperable Gateway Passes. Please get in touch or visit our FAQs page for more info about how we can help you with identity verification and general KYC processes.