[Congressional Record Volume 147, Number 159 (Friday, November 16, 2001)]
[Senate]
[Pages S12005-S12006]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY (for himself and Mr. Grassley):
  S. 1723. A bill to amend the Fair Credit Reporting Act with respect 
to the statute of limitations on actions; to the Committee on Banking, 
Housing, and Urban Affairs.
  Mr. LEAHY. Mr. President, this week the U.S. Supreme Court issued a 
ruling interpreting a provision in the Fair Credit Reporting Act that 
will make it harder for Americans to protect their private financial 
data from identity theft. I rise today with the senior senator from 
Iowa to introduce the ``Protect Victims of Identity Theft Act'' to 
provide consumers in Vermont and across America with the protections 
that they need and deserve. I thank Senator Grassley for his leadership 
and look forward to working with him on this legislation.
  Unfortunately, identity theft victimizes thousands of Americans every 
year. Once a skilled scam artist gets his hands on a consumer's Social 
Security or bank account number, he can wreak unimaginable havoc on a 
family's finances.
  With society conducting more and more of its business electronically, 
the incidence of identity theft in America is on the rise. As of June 
of this year, the Federal Trade Commission reported that its identity 
theft hotline was answering over 1,800 calls per week, up from the 445 
calls per week the hotline received in November 1999. These calls are 
mostly from people who have been hurt by identity theft, but thousands 
of others come from consumers worried about becoming an identity 
thief's next victim.
  When Congress passed the Fair Credit Reporting Act, FCRA, more than 
thirty years ago, it gave consumers important tools to ensure the 
accuracy and privacy of their credit information. The FCRA imposed 
affirmative obligations on the consumer reporting agencies that 
maintain these reports in order to protect consumers' private 
information from unauthorized disclosures. The FCRA says that consumer 
reporting agencies must maintain ``reasonable procedures'' to avoid 
improper use of a consumer's private information.
  These safeguards are essential to protect each American's 
confidential financial information. The FCRA demands that consumer 
reporting agencies require that prospective users of credit information 
identify themselves, certify the purposes for which they are seeking 
the information, and verify that they will not use the information for 
any other purpose, to name just a few examples. Consumer reporting 
agencies that fail to live up to these obligations or that are careless 
with consumers' private information can be held liable to consumers 
harmed by their security lapses.
  Current law provides consumers 2 years from the ``date on which the 
liability arises'' to bring suit against a non-compliant consumer 
reporting agency. This week, the United States Supreme Court concluded 
that the term ``the date on which liability arises,'' means the day 
that a consumer reporting agency fails to comply with FCRA's 
requirements. TRW Inc. v. Andrews, 2001 WL 1401902 (Nov. 13, 2001). As 
a result, the statute of limitations clock starts ticking whether or 
not a consumer is aware that information about his finances has been 
illegally handled or disclosed. That means that the 2-year limitations 
period can expire before a consumer ever even suspects that her credit 
information has fallen into the wrong hands.

[[Page S12006]]

  The 750,000 Americans who annually have their identity stolen and 
their credit put at risk deserve better. It is unfair for the law to 
only protect consumers if they discover the identity theft within 2 
years of the crime, even if the consumer had no reason to know about 
it. That stands the normal rule of discovery for fraud on its head.
  Our bipartisan legislation would clarify that the statute of 
limitations for identity theft does not start until the consumer 
discovers the problem or should have discovered the problem through the 
exercise of reasonable diligence. The exercise of reasonable diligence 
is the traditional common law duty under fraud discovery rules and does 
not impose any new mandate or requirement on a consumer under the FCRA. 
This change in the law ensures that consumers have a fair opportunity 
to vindicate their rights.
  This bipartisan legislative fix is needed to put a stop to identity 
theft. It will encourage consumer reporting agencies to establish 
proper security measures needed to deny identity thieves access to 
Americans' most personal financial information. It ensures that the 
Fair Credit Reporting Act has real teeth to fulfill its mission of 
protecting the accuracy and privacy of consumer credit information. And 
it will give consumers in Vermont and across America a fair shot at 
vindicating their right to keep private information away from 
unscrupulous con artists.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1723

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Protect Victims of Identity 
     Theft Act of 2001''.

     SEC. 2. AMENDMENT TO THE FAIR CREDIT REPORTING ACT.

       Section 618 of the Fair Credit Reporting Act (15 U.S.C. 
     1681p) is amended to read as follows:

     ``SEC. 618. JURISDICTION OF COURTS; LIMITATIONS OF ACTIONS.

       ``(a) In General.--An action to enforce any liability 
     created under this title may be brought in any appropriate 
     United States district court, without regard to the amount in 
     controversy, or in any other court of competent jurisdiction, 
     not later than 2 years after the date on which the violation 
     is discovered or should have been discovered by the exercise 
     of reasonable diligence.
       ``(b) Willful Misrepresentation.--The limitations period 
     prescribed in subsection (a) shall be tolled during any 
     period during which a defendant has materially and willfully 
     misrepresented any information required under this title to 
     be disclosed to an individual, and the information so 
     misrepresented is material to the establishment of the 
     liability of the defendant to that individual under this 
     title.''.

  Mr. GRASSLEY. Mr. President, I am pleased to join my colleague from 
Vermont in introducing a bill to protect victims of identity theft.
  This legislative remedy is prompted by the sweeping impact of the 
Supreme Court's decision this past week on the rights of more than 
750,000 Americans who annually have their identity stolen and their 
credit put at risk. Under current law, consumers have a two-year 
statute of limitations to sue credit reporting companies that fail to 
protect private financial information from improper disclosures and 
security lapses. The problem with the Supreme Court's decision is that 
a victim of identity theft often has no idea that information about his 
finances has been negligently handled or disclosed by a credit 
reporting company until it's too late to take any legal action. Under 
current law, the two year statute of limitations begins when the 
consumer's credit reporting company fails to comply with the law--not 
when the consumer discovers or should have discovered the problem.
  Our bill, the Protect the Victims of Identity Theft Act of 2001, 
changes that rule. As stated, it simply clarifies that the statute of 
limitations for identity theft does not start until the consumer 
discovers the problem or should have discovered the problem. This 
change in the law ensures that consumers have a fair chance to 
vindicate their rights should credit reporting companies fail to take 
reasonable steps to protect private financial and personal information 
from theft and misuse.
  I urge my Senate colleagues to join us in co-sponsoring this 
legislation to protect the American consumer.
                                 ______