Identity Theft Protection
Each week we read of a new loss of personal data that threatens thousands of Americans with identity theft. In this age of electronic banking and internet transactions, it is easier than ever to have your personal data stolen. Almost every state, including New York, have responded to this threat by enacting laws that allow individuals to protect themselves from identity theft by controlling access to their credit report and the personal data it contains. I am working in congress to expand this “file freeze” protection at the national level and enhance notification requirements when personal data is lost. Identity theft is the fastest growing crime reported to the Federal Trade Commission, with over 250,000 reported instances in 2006 to date. By now, many victims have found out the hard way that once a criminal sets up false accounts in your name, it is very difficult to clear your credit, and you may be unable to buy a car, or a house, or get a credit card, for years.
File freeze should be available to everyone because it is the most effective tool to combat identity theft. A credit report freeze works because it actually stops the granting of new credit without the consumer’s express permission, and thus prevents identity theft. In contrast, a fraud alert, the solution advocated by the credit rating industry, only conditions the granting of credit, and can easily be evaded by a criminal who has stolen the victim’s Social Security number and birth-date. That’s why many states have now adopted universal file freeze.
My federal file freeze bill does not affect the use of credit cards or existing credit lines. It only prevents the issuance of new credit unless the individual requests the credit report be sent to the lender. This gives individuals control over their credit report and allows them to protect themselves. Any federal file freeze must be easy to use, convenient, and low cost, and my bill provides that. Also, my bill sets a federal floor, but allows states to provide faster and cheaper file freeze as technology permits.
Although some question whether it will be too hard for individuals to unfreeze their reports, homebuyers and car buyers are still getting loans in California and other states that have had file freeze for some time. The experience of these states gives me confidence that technology can solve this problem. A national standard giving all individuals the ability to control access to their credit reports would create the market conditions for new security systems to develop to make the process of freezing and unfreezing even easier. Just as when eBay burst on the scene we had secure payments systems like PayPal spring up, so if file freeze becomes a national phenomenon, we will have entrepreneurs develop secure systems of freezing and unfreezing.
I will continue to fight for universal file freeze when the next data security bill comes to the Floor to protect the rights of New Yorkers and the rights of states to protect their citizens from identity theft. Otherwise New Yorkers could wake up one morning to find their rights gone.
Cosponsored Legislation in the 109th Congress
03/03/06 – H.R. 1069 -Notification of Risk to Personal Data Act - Requires a financial institution to promptly notify each affected customer and appropriate regulators if the institution or its agents become aware of a breach of personal information.
06/30/05 - H.R. 3140 - Consumer Data Security and Notification Act of 2005 - Extends the Fair Credit Reporting Act (FCRA) to cover communication of personally identifiable information by information brokers to third parties.