Senator Feinstein Introduces New Bipartisan Legislation to Combat Identity Theft
March 30, 2000

Washington, DC – U.S. Senator Dianne Feinstein (D-CA) introduced bipartisan legislation today to combat the growing practice of “identity theft.”

The Identity Theft Prevention Act of 2000, co-sponsored by Senators Jon Kyl (R-Arizona) and Charles Grassley (R-Iowa), makes it more difficult for criminals to access personal information of unknowing consumers, gives consumers additional tools to uncover fraudulent activity conducted by others in their name, and expands the authority of the Social Security Administration to prosecute identity theft.

“In our new technology-driven economy, we cannot allow American consumers to be left vulnerable to predators out to steal their good name,” Senator Feinstein said. “This legislation implements a number of practical and concrete measures to close down the flow of private personal information to those with criminal intent.”

Identity theft occurs when one person uses another person’s Social Security number birth date, driver’s license number, or other identifying information without permission to obtain credit cards, car loans, phone plans or other services in the potential victims names. Identity thieves can access personal information in a myriad of ways – stealing wallets or mail, accessing personal information from the Internet, fraudulently obtaining credit reports, or getting personnel records from the workplace.

In recent years, identity fraud and theft has grown. According to the TransUnion Corporation, a national credit bureau, the total number of identity theft inquiries to its Theft Victim Assistance Department increased 1400 percent, from 35,235 cases in 1992 to 522,922 cases in 1997. The U.S. Postal Service reports that 50,000 people a year have become victims of identity theft and the U.S. Treasury Department estimates that identity theft causes from $2 billion to $3 billion in losses annually from credit alone.

In her role as ranking member on the Senate Judiciary Subcommittee of Terrorism, Technology, and Government Information, Senator Feinstein pointed to a number of examples of identify theft victims to show why the bill is necessary. “At a recent hearing, Maureen Mitchell described why such assistance is necessary. ‘I have logged over 400 hours of time trying to clear our names and restore our good credit. Words are unable to adequately express the gamut of emotions that we have experienced as victims.’”

“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 tutor, my hours are worth thirty-five dollars. I have been robbed of $5,250 in time. I have been humiliated in my local stores because my checks have been rejected at the check out, I am emotionally drained. I am a victim, and Congress needs to recognize me as such.’”

Specifically, the Identity Theft Prevention Act of 2000 would:

• Eliminate the loophole in the Fair Credit Reporting Act that permits credit bureaus to sell personal information such as Social Security Numbers, birth dates, and mother’s maiden names to marketers without restrictions;

• Authorize the Social Security Administration to impose up to a $5,000 maximum fine for the misuse of a Social Security Number;

• Entitle every citizen to one free credit report every year. Currently six states have statutes that entitle consumers to one free personal credit report annually. The bill also gives expanded access to databases that sell personal information so that consumers can proactively check their records for evidence of identity theft and uncover other errors;

• Codify the establishment of a fraud alert on a consumer’s credit file and give the Federal Trade Commission the authority to fine those credit issuers that ignore this fraud alert;

• Improve the way in which credit card companies handle requests for new credit cards and changes-of-address. For example, the legislation would require that credit card holders always be notified at their original address when a duplicate card is sent to a new address;

• Require Credit Bureaus to investigate discrepancies between their records and the information provided by credit card applicants; and

• Help consumers repair fraudulently damaged credit records by authorizing the development of a “model form” that they can use to alert companies of false charges.