House likely to approve bill to combat identity theft

By Jesse J. Holland
Associated Press

WASHINGTON — Legislation awaiting House approval would give people new weapons against identity theft, offering a free credit report annually and an easier way to block thieves from opening fraudulent accounts.

Those steps were among the changes that lawmakers were debating yesterday to the Fair Credit Reporting Act, which contains provisions that must be renewed by year's end.

Identity theft cost consumers and businesses $53 billion last year, the Federal Trade Commission said last week, with almost 10 million Americans falling victim to thieves using their name and other personal information, such as a Social Security number or bank and credit card numbers, to establish credit or buy products.

"This bill will give consumers the weapons they need to fight identity thieves and the tools to repair their credit history after an attack," said House Financial Services Chairman Michael Oxley, R-Ohio.

Under the legislation, all consumers would have the right to a free copy of their credit report annually upon request. Only six states — Colorado, Georgia, Maryland, Massachusetts, New Jersey and Vermont — require the nation's three major credit bureaus — Equifax Inc., Experian Information Solutions Inc. and Trans Union — to give consumers free credit reports every year.

The bill also gives consumers "one-call-for-all" protection by requiring credit bureaus to share consumer calls on identity theft.

"This legislation not only empowers consumers with protections, it also demands creditors and credit bureaus do their part to combat fraud," said Rep. Darlene Hooley, D-Ore.

With both Democratic and Republican support — it passed the House Financial Services Committee on a 61-3 vote — the legislation is expected to pass the House overwhelmingly.

The White House also supports the legislation.

"The bill removes the sunsets from the Fair Credit Reporting Act and includes many of the administration's proposed consumer protections, including new tools to help fight identity theft," White House officials said in a statement.

The Senate Banking Committee is expected to start moving on similar legislation soon.

Congress must address the Fair Credit Reporting Act this year because the 1996 provisions that instituted uniform reporting requirements expire at the end of 2003.

However, several consumer groups have come out against the legislation, which would pre-empt tougher state legislation on the sharing of personal data.

For example, California just passed a law allowing California consumers to block banks, insurance companies and other institutions from sharing their personal information.

"We believe that all Americans deserve the same protections," said a coalition of consumer and privacy groups including Consumers Union, U.S. Public Interest Research Group, Consumer Action and the NAACP in a letter sent Tuesday to Congress. "At the very least, stronger state financial privacy giving citizens the right to choose whether their banks share or sell confidential financial information should not be pre-empted."

At a glance

Legislation in the House would give people new weapons against identity theft. The bill would:

• Allow consumers to place "fraud alerts" in their credit reports to prevent identity thieves from opening accounts in their names.
• Allow consumers to block information from being given to a credit bureau and from being reported by a credit bureau if such information results from identity theft.
• Provide identity-theft victims with a summary of their rights.
• Give consumers the right to see their credit scores.
• Give all consumers the right to a free copy of their credit report annually.
• Provide consumers with one-call-for-all protection by requiring credit bureaus to share consumer calls on identity theft, including requested "fraud alert" blocking.
• Require creditors to take extra precautions before extending credit to consumers who have placed alerts in their files.
• Prohibit merchants from printing more than the last five digits of a payment card on an electronic receipt.
• Require financial institutions to reconcile potentially fraudulent consumer address information.
• Require lenders to notify consumers before submitting negative credit information.