[Congressional Record Volume 143, Number 38 (Friday, March 21, 1997)]
[Senate]
[Pages S2741-S2742]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KYL:

  S. 512. A bill to amend chapter 47 of title 18, United States Code, 
relating to identity fraud, and for other purposes.


        THE IDENTITY THEFT AND ASSUMPTION DETERRENCE ACT OF 1997

  Mr. KYL. Mr. President, with increasing frequency, criminals are 
using the Social Security numbers and other personal information of 
law-abiding citizens to assume their identity and take their money. 
Identity fraud can be more serious than a criminal picking someone's 
pocket and lifting cash or a credit card. Identity theft involves 
criminals--who may have ties with international criminal syndicates--
obtaining enough information on another person that they can open up 
new credit card accounts in the law-abiding person's name. Some call 
identity theft high-technology bank robbery. But law-enforcement 
officials say committing identity fraud is easier than robbing a bank.
  Identity fraud is one of the fastest growing financial crimes. An 
alarming 2,000 cases occur each week. Credit-card fraud losses--the 
major financial loss in personal-identity thefts--may amount to as much 
as $2 billion a year.
  The statistics don't reveal the hardship these crimes can cause. 
Imagine the anxiety of knowing that a criminal has been able to gain 
hold of your most personal identification information to open credit 
cards or apply for loans in your name. Even when fraudulent charges are 
cleared from a victim's financial records, he or she cannot be sure 
that the perpetrator of the crime

[[Page S2742]]

won't strike again. Moreover, thousands can be spent to repair a 
tarnished credit rating. As the victim attempts to untangle the mess 
caused by an identity thief, phone service may be disconnected or a 
victim may face difficulty in securing a mortgage.
  I would like to discuss the case of a constituent, Bob Hartle, who 
has spent many hours working with my staff on the identity-theft 
proposal. Mr. Hartle served as the inspiration for an Arizona State law 
which, like the bill I am introducing, makes it a felony to steal 
another person's identity. I thank Mr. Hartle for all of his help.
  Bob Hartle's experience with an identity thief illustrates the 
seriousness of these crimes. The man who victimized Mr. Hartle was 
sentenced to 17 months in Federal prison for using false names--not Mr. 
Hartle's; the criminal had misappropriated other law-abiding citizens' 
names--in order to buy a gun and open up a credit card account. The 
criminal possessed enough information to have a driver's license and 
credit cards issued in Mr. Hartle's name. With these credit cards, the 
criminal made purchases under Mr. Hartle's name that exceeded $100,000. 
While trashing Mr. Hartle's credit, and carrying a license as Mr. 
Hartle in his wallet, the identity thief was busy committing serious 
crimes. Mr. Hartle has spent over $10,000 trying to clear his good name 
and credit. He did not receive a restitution payment. The assistant 
U.S. attorney who prosecuted the case was quoted in a 1995 news story 
as saying that, ``Hartle may never get his full share from the courts. 
* * * All we can do is prosecute this under the powers given to us by 
law.''
  Restitution was not available to him because, although many of the 
actions attendant upon identity theft do violate Federal law--that is, 
credit card fraud, using false names--the actual assumption of 
another's identity does not. Consequently, individual victims of these 
offenses are not entitled to restitution.
  The criminal who ripped off Mr. Hartle's identity committed several 
such crimes throughout the United States before he was finally 
apprehended. Acting alone, he caused great damage and hardship. But a 
new breed of identity-fraud criminal has emerged that poses an even 
greater threat to citizens. Sophisticated international criminal 
syndicates, some of which have penetrated the Social Security 
Administration and other agencies or companies with access to private 
personal information, are engaging in identity-fraud scams of a 
magnitude unimaginable a few years ago.
  For example, the New York Post reported on December 29 that ``A 
brazen city-based ring of con artists has been lifting personal 
information about hundreds of New Yorkers and using it to get credit 
cards and run up huge bills.'' This ring of Nigerian nationals applies 
for credit cards with banks ``after snatching identifying data about 
unsuspecting victims.'' Identity-fraud syndicates such as these obtain 
Social Security numbers and other personal information to perpetrate 
their scams in myriad ways: stealing mail; collecting credit-card 
receipts; running license plates through DMV records; posing as a loan 
officer and ordering a credit report; purchasing information from 
corrupt governmental and private employees with access to personal 
information.
  One of the reasons I elected to chair the Senate Judiciary 
Committee's Subcommittee on Technology, Terrorism, and Government 
Information was to ensure that the law keep pace with technology. The 
Secret Service, which is responsible for investigating financial fraud 
crimes, believes Federal fraud laws could be improved, to better 
protect people like Mr. Hartle, and I thank the agency for all of its 
help in drafting the bill. Rather than amend the Federal fraud laws, my 
proposal creates a separate statute for identity-fraud offenses, which 
I am told will make this crime easier to investigate and prosecute. 
When the fraud laws were drafted, the law-enforcement community was 
contending with counterfeiters who manufactured, distributed, and used 
ID's that were pieces of paper. Identity-fraud schemes were not nearly 
as prevalent in that pre-electronic era as they are today.
  As mentioned above, individual victims of fraud offenses--who, like 
Mr. Hartle, are generally not eligible for restitution under current 
law--could receive restitution under my proposal. Additionally, the act 
allows law enforcement to seize equipment--contraband--used to produce 
false documents. Penalties are scaled to reflect the number of victims, 
not just the dollar amount of the fraud.
  Moreover, the proposal requires the Secret Service to collect 
statistics on identity fraud offenses. Statistics on identity fraud are 
rough; we need to know more about the extent of the problem.
  And finally, the bill directs the Secretary of the Treasury and the 
Chairman of the Federal Trade Commission to conduct a comprehensive 
study of: the nature, extent, and causes of identity fraud; the threat 
posed by identity fraud to financial institutions and payment systems; 
and the threat to consumer safety and privacy. The results of the study 
will be submitted to Congress with specific recommendations for 
legislation to address the problem of identity theft. This study is 
very important. Access to confidential information facilitates credit-
card identity assumption scams. With identity fraud rising, we must 
continually reevaluate statutes regulating consumer privacy.
  This is the other side of the coin when it comes to deterring this 
kind of fraud. We need to go after criminal activity when it occurs, 
but we also must prevent the careless circulation of personal 
information to begin with.
  In fact, action has already been taken by Congress to better protect 
private identity information. In September, the Driver's Privacy 
Protection Act of 1994 goes into effect to restrict release and use of 
certain personal information from State motor vehicle records. Other 
efforts are underway. In August, the FTC--responding to suggestions 
that Social Security numbers were easily available on the Internet--
held a staff meeting to exchange information on consumer identity 
fraud, and following the meeting suggested that Congress consider 
legislation to tighten restrictions on the release of private identity 
information.
  The bill I am introducing today is targeted at the criminals: those 
who perpetrate identity theft crimes. Congress will need to consider 
other measures seeking the assistance of the custodians of personal 
identity information to make identity theft crimes more difficult to 
commit. I believe that my bill represents a solid first effort to 
combat identity theft, and I request that my colleagues support the 
Identity Theft and Assumption Deterrence Act.
                                 ______