[Congressional Record Volume 146, Number 38 (Thursday, March 30, 2000)]
[Senate]
[Pages S1987-S1988]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. FEINSTEIN (for herself, Mr. Kyl, and Mr. Grassley):
  S. 2328. A bill to prevent identity fraud in consumer credit 
transactions and credit reports, and for other purposes; to the 
Committee on Banking, Housing and Urban Affairs.


                 IDENTITY THEFT PREVENTION ACT OF 2000

  Mrs. FEINSTEIN. Mr. President, I rise to send to the desk a bill 
cosponsored by Senator Kyl of Arizona and Senator Grassley of Iowa for 
reference to committee.
  The bill is entitled the ``Identity Theft Prevention Act of 2000.''
  The crime of identity theft has become one of the major law 
enforcement challenges of the new economy because vast quantities of 
sensitive personal information are now vulnerable to criminal 
interception and misuse.
  What is identity theft? Identity theft occurs when one person uses 
another person's Social Security number, birth date, driver's license 
number, or other identifying information to obtain credit cards, car 
loans, phone plans, or other services in the potential victim's name. 
Of course, the victim does not know the theft has happened until he or 
she receives bills for items he or she didn't buy; plans for which he 
or she didn't contract, and so on.
  Identity thieves get personal information in a myriad of ways. They 
steal wallets and purses containing identification cards. They use 
personal information found on the Internet. They steal mail, including 
preapproved credit offers and credit statements. They fraudulently 
obtain credit reports or they get someone else's personnel records at 
work.
  All indications are that there is an alarming growth of this highly 
invasive crime. I believe the time has come to do something about it. A 
national credit bureau has reported that the total number of identity 
theft inquiries to its Theft Victim Assistance Department grew from 
35,000 theft inquiries in 1992 to over one-half million in 1997. That 
is over a 1,400-percent increase. It is national. It touches every 
State and it impacts every area of our citizenry.
  The United States Postal Inspection Service reports that 50,000 
people a year have become victims of identity theft since it first 
began collecting information on identity theft in the mid-1990s. In 
total, the Treasury Department estimates that identity theft annually 
causes between $2 and $3 billion in losses from credit cards alone.

  The legislation I introduce today, along with Senators Kyl and 
Grassley, tackles this issue. It makes it harder for criminals to 
access another person's private information, it gives consumers more 
tools to uncover fraudulent activity conducted in their name, and it 
expands the authority of the Social Security Administration to 
prosecute identity theft.
  The Identity Theft Prevention Act makes it harder for criminals to 
steal personal information. First, it closes a loophole in the Fair 
Credit Reporting Act that permits personal identifying information such 
as Social Security numbers, one's mother's maiden name, and birth date 
to be distributed without restriction to marketers. This sensitive 
information would be treated under this bill like any other part of the 
credit report, with its disclosure restricted to businesses needing the 
data for extensions of credit, employment applications, insurance 
applications, or other permissible purposes.
  This bill codifies, also, the practice of placing fraud alerts on a 
consumer's credit file and gives the Federal Trade Commission the 
authority to impose fines against credit issuers that ignore the alert. 
Too many credit issuers are presently ignoring fraud alerts to the 
detriment of identity theft victims.
  Additionally, the bill requires credit bureaus to investigate 
discrepancies between their records and the address, birth date, and 
other personal information submitted as a part of an individual's 
application for credit, so that telltale signs of fraudulent 
applications such as incorrect addresses are immediately flagged.
  The bill improves how credit card companies monitor requests for new 
credit cards or changes of address. For example, it requires that 
credit card holders always be notified at their original address when a 
duplicate card is sent to a new address.
  This legislation also gives consumers more access to the personal 
information collected about them, which is a critical tool in combating 
identity theft. Currently, six States--Colorado, Georgia, 
Massachusetts, Maryland, Vermont, and New Jersey--have statutes that 
entitle consumers to one free personal credit report annually. This act 
makes this a national requirement. Every consumer across this Nation 
would have access to a free credit report. In addition, consumers could 
review the personal information collected about them by individual 
reference services for a reasonable fee. With greater access to their 
own personal information, consumers can proactively check their records 
for evidence of identity theft and uncover other errors.
  We have worked with the staff of the Federal Trade Commission in 
preparing this legislation. I believe the staff of the FTC is 
supportive of this bill. This bill is also supported by the Consumer 
Federation of America.
  We try to empower victims in this bill. This legislation calls for 
measures to help identity theft victims recover from the crime. In 
cases of identity theft, all too often victims get treated as if they 
were the criminals. Victims receive hostile notices from creditors who 
mistakenly believe they have not paid their bills. Victims' access to 
credit is jeopardized, and they can spend years trying to restore their 
good name.
  This legislation calls upon the credit industry to assist victims in 
notifying credit issuers of fraudulent charges by developing a single 
model credit reporting form. However, should the credit industry fail 
to implement these measures, the Federal Trade Commission would then be 
authorized to take action.
  Maureen Mitchell, an identity theft victim, recently described why 
this assistance is needed at a hearing before the Judiciary Committee 
Subcommittee on Terrorism, Technology, and Government Information, a 
subcommittee on which I am ranking member. She said:

       I have logged over 400 hours of time trying to clear my 
     name and restore my good credit. Words are unable to 
     adequately express the gamut of emotions that I feel as a 
     victim.

  Another victim wrote to me:

       I have spent an ungodly number of hours trying to correct 
     the damage that has been done by the individual who stole my 
     identity. Professionally, as a teacher and a tutor, my hours 
     are worth $35. I have been robbed of $5,250 in time. I have 
     been humiliated in my local stores because checks have been 
     rejected at the checkout. I am emotionally drained. I am a 
     victim and Congress needs to recognize me as such.

  We try in this bill to do that.
  This legislation targets the theft and misuse of another person's 
Social Security number, a major cause of identity theft. While the 
Social Security Administration has the ability to impose civil 
penalties for misusing a Social Security number to falsely obtain 
government benefits, it has no authority over other offenses involving 
the misuse of Social Security numbers. This bill gives them that 
authority. The

[[Page S1988]]

Identity Theft Prevention Act authorizes the Social Security 
Administration to impose civil monetary penalties against any 
individual who:
  (1) knowingly uses another's Social Security number on the basis of 
false information provided by them or another person;
  (2) falsely represents a number to be a Social Security number when 
it is not;
  That means, makes up a number, which people do.
  (3) alters a Social Security card; or
  (4) compels the disclosure of a Social Security card in violation of 
the law.
  I think these provisions enable the Social Security Administration to 
throw its full weight into the investigation and civil prosecution of 
identity theft involving Social Security numbers.
  In conclusion, I hope my colleagues find this bill worthy and pass 
it. This bill implements a number of practical, concrete measures to 
close down the flow of private information to individuals with criminal 
intent. In this new technology-driven economy, consumers don't need to 
be left vulnerable. They shouldn't be left without recourse to 
predators who are out to steal their good name.
  I think we have a very practical solution. It is well thought out. It 
is well drafted. It has been worked out with the staff of the FTC. My 
hope is, when it goes to the Banking Committee, that committee would 
take a good look at it and pass it. This is an increasing problem. 
There is no reason to believe it will stop. Without Congress providing 
basic protections to individuals who are the victims, it will continue 
to grow.
                                 ______