House bill provides key protections against identity theft

FOR IMMEDIATE RELEASE
March 29, 2006

Contact:
Susanna Montezemolo, 202-462-6262 – montsu@consumer.org
Gail Hillebrand, 415-431-6747

(Washington, DC) — Consumers Union, the nonprofit, independent publisher of Consumer Reports, today commended the House Energy and Commerce Committee’s 41-0 unanimous vote in favor of H.R. 4127, which provides much-needed consumer protections to protect against identity theft.

The vote by the Committee requires all companies to notify consumers if the security of their personal information has been breached unless there is no reasonable risk of harm and to put in place stronger security safeguards. It also allows consumers to review and dispute the information so-called data brokers hold on them and prohibits these companies from using false pretenses to obtain personal information.

“In this information age, where practically every day we hear about companies that put Americans at risk for identity theft and fraud because of lax security practices, we desperately need these new tools to protect our personal information,” said Susanna Montezemolo, policy analyst with Consumers Union, publisher of Consumer Reports.

The measure gives consumers a new right to review and dispute their personal information held by data brokers like ChoicePoint and Lexis-Nexis, which profit from buying and selling of information like our financial records, employment histories, fingerprints, and medical and criminal records. ChoicePoint has been under recent scrutiny since the Federal Trade Commission negotiated the largest civil penalty ever — $10 million — for the company’s admission that it sold 163,000 personal records to identity thieves.

“This bill ensures that consumers know when their personal information has been lost or stolen, so they can then take reasonable steps to prevent becoming victims of identity theft,” Montezemolo said. “Such steps include monitoring their credit files more closely, placing an initial fraud alert on their credit file, and placing a security freeze on their credit file if they live in a state that allows it,” she added.

Today’s bipartisan, unanimous vote stands in sharp contrast to the House Financial Services Committee’s vote two weeks ago to pass a much weaker data bill, H.R. 3997, which provided no benefits to consumers and rolled back existing state laws.

“We are pleased that despite intense industry lobbying, the House Commerce Committee unanimously voted to protect consumers,” Montezemolo said. “We are hopeful this unanimous, bipartisan support will provide this bill with the momentum it needs to pass the full Congress,” she added.

There are nearly 10 million identity theft victims each year, according the Federal Trade Commission, or an estimated 19 identity theft victims a minute. The crime has cost businesses, financial institutions and consumers billions of dollars in recent years.