FTC Testimony on Identity Theft

Positive Steps Can Be Taken To Alleviate Harm To Consumers and Reduce Occurrence, Agency Says

The FTC today told the Senate Judiciary Committee's Subcommittee on Technology, Terrorism, and Government Information that while there is good reason for consumers to be concerned about falling victim to identity theft, there are "real and positive steps" that can be taken to reduce the incidence of this crime and alleviate the harm to consumers. Testifying on behalf of the agency, J. Howard Beales, Director of the Bureau of Consumer Protection said, "We are committed to working with our partners in the public and private sectors, and will continue to forge a comprehensive approach to this challenge."

"The FTC enforces a number of laws that address consumers' privacy, and intends to increase substantially the resources devoted to privacy protection," the testimony says. "The FTC's identity theft program is an important part of that initiative. Consumer and victim assistance, data sharing with law enforcement and financial institutions, and cooperative efforts with the private sector are among the most visible examples of the FTC's effort."

The testimony notes that since the 1998 passage of the Identity Theft Act, the agency has established a toll-free hotline to provide victim assistance and consumer counseling, developed a database clearinghouse of identity theft complaints, and launched a consumer and business education campaign. "The Clearinghouse is the federal government's centralized repository of consumer identity theft complaint information. . . . More than 270 law enforcement agencies nationwide have signed confidentiality agreements that grant them membership and access to the Identity Theft Data Clearinghouse," the testimony says.

The FTC has taken a series of initiatives with both public and private sector entities to encourage the investigation and prosecution of identity theft cases and to help consumers resolve identity theft problems. In coordination with the United States Secret Service, it has launched an identity theft case referral program to assist in the detection and prosecution of identity thieves. In addition, it has initiated a series of training seminars for state and local law enforcement officers to be held in major cities across the country. "The training seminar provides officers with technical skills and resources to enhance their efforts to combat identity theft, including strategies for both traditional and high-tech investigations. The training also identifies key components for successful actions by local, state, and federal prosecutors, and identifies resources, such as the Clearinghouse database, that are available to law enforcement when conducting identity theft investigations. Our goal is to encourage the prosecution of these cases at all levels of government," the testimony says.

The agency also has worked with the private sector to reduce the burden on identity theft victims by developing a single affidavit consumers can use with all the credit reporting agencies to report the theft of their identity. "The affidavit was the culmination of an effort we coordinated with private industry and consumer advocates to create a standard form for victims to use in absolving identity theft debts with each of the creditors where identity thieves opened accounts. . . . From its release in August 2001 through February 2002, we have distributed more than 112,000 print copies of the Affidavit. There have also been nearly 185,000 hits to the Web version."

The agency is working with the major credit reporting agencies (CRAs) on a fraud alert initiative to help ID theft victims. The Commission has also supported the efforts of the International Association of Chiefs of Police to encourage local police officers to write police reports for victims of identity theft. "Under the new initiative, the CRAs have agreed to block inaccurate information resulting from the identity thief's activities from a victim's credit report if the victim provides the CRA with a police report on the incident. The program further speeds the process of rehabilitating the victim's good name," the testimony notes.

"The economic and non-economic injury caused by the misuse of consumers' personal information is significant. But there are real and positive steps we can take to alleviate the harm to consumers, and reduce the incidence of this crime. We are committed to working with our partners in the public and private sectors and will continue to forge a comprehensive approach to this challenge," the testimony concludes.

The Commission vote to approve the testimony was 4-0, with Commissioner Sheila Anthony not participating.

Copies of the testimony are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov.

Betsy Broder

Bureau of Consumer Protection

202-326-2968

(FTC File No. P0014101

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