[Federal Register Volume 61, Number 249 (Thursday, December 26, 1996)]
[Notices]
[Pages 68044-68045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32495]
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FEDERAL RESERVE SYSTEM
[Docket No. R-0953]
Fair Credit Reporting
AGENCY: Board of Governors of the Federal Reserve System (Board).
ACTION: Notice; request for comments.
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SUMMARY: The Board solicits comment on issues to be addressed in a
study concerning the public availability and use of social security
numbers and other sensitive identifying information about consumers.
The Board's study is required by the Economic Growth and Regulatory
Paperwork Reduction Act of 1996.
DATES: Comments must be received on or before January 31, 1997.
ADDRESSES: Comments should refer to Docket No. R-0953, and may be
mailed to William W. Wiles, Secretary, Board of Governors of the
Federal Reserve System, 20th Street and Constitution Avenue, N.W.,
Washington, DC 20551. Comments also may be delivered to Room B-2222 of
the Eccles Building between 8:45 a.m. and 5:15 p.m. weekdays, or to the
guard station in the Eccles Building courtyard on 20th Street, N.W.
(between Constitution avenue and C Street) at any time. Comments may be
inspected in Room MP-500 of the Martin Building between 9:00 a.m. and
5:00 p.m. weekdays, except as provided in 12 CFR 261.8 of the Board's
rules regarding the availability of information.
FOR FURTHER INFORMATION CONTACT: Jane Jensen Gell or Sheilah Goodman,
Staff Attorneys, Division of Consumer and Community Affairs, at (202)
452-2412 or (202) 452-3667; for users of Telecommunications Device for
the Deaf (TDD) only, please contact Dorothea Thompson at (202) 452-
3544.
SUPPLEMENTARY INFORMATION:
I. Background
On September 30, 1996, the President signed into law the Economic
Growth and Paperwork Reduction Act of 1996 ( Pub. L. 104-208, 110 Stat.
3009) (the 1996 Act). The 1996 Act amends several consumer credit laws,
including the Fair Credit Reporting Act (FCRA) (15 U.S.C. 1681). An
amendment to the FCRA directs the Board of Governors of the Federal
Reserve System (Board), in consultation with the Federal Trade
Commission (the Commission) and the federal financial regulatory
agencies, to conduct a study to determine the availability to the
public of sensitive identifying information about consumers, the
possibility that such information could be used for financial fraud,
and the potential for fraud or risk of loss, if any, to insured
depository institutions. By March 31, 1997, the Board must report the
results of the study to the Congress, including any suggestions for
legislative change. The Board solicits the comment of interested
parties on these issues. The comments received will be used in the
Board's study. Because of the short time frame the Congress gave the
Board to study this matter, all comments must be received by January
31, 1997.
II. Availability of Sensitive Consumer Information
The Congress became concerned about the availability of sensitive
identifying information about consumers after a widely-publicized
incident in which a large database service offered personal information
for sale--including individuals' social security numbers-- from one of
its electronic databases. After a few days, the service discontinued
the practice of making social security numbers available but continued
to permit users to search for information by social security number. At
about the same time, members of Congress learned of situations in which
such identifying information was being used for financial fraud. In
addition, testimony at a recent Federal Trade Commission hearing
highlighted how easy it is to obtain identifying information about a
consumer and to use that information to fraudulently receive credit in
the consumer's name--without the knowledge of the consumer or the
credit granting institution. This practice is often referred to as
``identity theft.'' Armed with such information, criminals can request
and receive credit or negotiate checks in the consumer's name, with
devastating results for the consumer.
Sometimes identity theft begins with the use of publicly available
information. A government employee who participated in the Commission
hearings related such an incident. General information about this
witness was listed in a publicly-available government directory. Using
that information, an unknown individual was able to obtain a copy of
the employee's college transcript, which showed his social security
number. The individual was able subsequently to get a copy of the
employee's birth certificate using the social security number. The
thief then had all he needed to ``assume'' the employee's identity and
use the information to commit fraud.
III. Request for Comment
In response to concerns about the availability of identifying
information about consumers, and anecdotal evidence suggesting an
increase in identity theft and financial fraud, the Congress has
directed the Board to conduct a study regarding the availability to the
public of sensitive information used to identify consumers. The Board
is to determine whether there are organizations ``engaged in the
business of making sensitive consumer identification information,
including social security numbers, mothers' maiden names, prior
addresses and dates of birth, available to the general public.'' To
help make this determination, the Board solicits comment on the
following issues:
1. What is or should be considered sensitive consumer information
for purposes of the study?
2. What information is currently used, or might be used in the
future, to identify individuals, and what types of public or private
organizations, repositories, or databases make such
[[Page 68045]]
information available to certain entities or to the general public?
3. How is the information obtained (for example, by phone, through
the mail, or on the Internet), what costs are associated with obtaining
the information, what are the specific uses for which the information
is obtained, and does the furnisher place any restrictions on the
distribution or use of this information on the purchaser? If so, how
does the furnisher ensure that use of the data is limited to its
intended purposes?
4. Is the compilation, sale, and use of sensitive identifying
information about consumers subject to industry guidelines or
regulations, and if not, what guidelines, regulatory or legal
requirements might be appropriate?
If sensitive information about consumers is available, the Board
must determine whether the availability of the information creates
``undue potential for fraud and risk of loss to insured depository
institutions.'' In order to make this assessment, the Board seeks
comment on the following issues:
5. How is sensitive identifying information about consumers used
for financial fraud (for example, to obtain a credit card in another
person's name)?
6. What types of identifying information about consumers are most
meaningful in granting and verifying credit, and how can consumers,
financial institutions, and others control the fraudulent use of this
information?
7. What magnitude of financial loss do institutions attribute to
fraudulent use of consumer information?
Finally, if the Board determines that additional laws are needed to
lessen the risks of fraud and loss to the banking system, the Board is
directed to make legislative recommendations to the Congress.
Accordingly, the Board is seeking comment on the following issues:
8. What, if any, legislative changes should be considered to help
protect sensitive identifying information about consumers?
9. What, if any, legislative changes should be considered to limit
the use of such information and reduce the risk of fraud or other loss
to the banking system?
IV. Form of Comment Letters
Comment letters should refer to Docket No. R-0953, and, when
possible, should use a standard courier typeface with a type size of 10
or 12 characters per inch. This will enable the Board to convert the
text to machine-readable form through electronic scanning, and will
facilitate automated retrieval of comments for review. Also, if
accompanied by an original document in paper form, comments may be
submitted on 3\1/2\ inch or 5\1/4\ inch computer diskettes in any IBM-
compatible DOS-based format.
By order of the Board of Governors of the Federal Reserve
System, December 17, 1996.
William W. Wiles,
Secretary of the Board.
[FR Doc. 96-32495 Filed 12-24-96; 8:45 am]
BILLING CODE 6210-01-P