Testimony of Representative Darlene Hooley
Hearing Before the House Banking Committee on
H.R. 4311: The Identity Theft Prevention Act of 2000

Mr. Chairman, I would like to thank you for holding this hearing today, and for letting me testify before the committee on my bill H.R. 4311, The Identity Theft Protection Act of 2000.

As you know, I introduced this bill with Representative LaTourette and twelve other Democratic and Republican cosponsors and it is a companion bill to S. 2328 introduced in the Senate, again on a bi-partisan basis, by Senators Feinstein, Kyl, and Grassley.

Identity theft occurs whenever someone uses your name, Social Security Number, mothers maiden name, or any personally identifiable information to purchase goods or services.

While credit issuers have been willing to refund fraudulent charges, victims are still faced with problems of ruined or destroyed credit, the time commitments of redeeming their name with multiple credit bureaus and credit issuers, and the fear and anxiety associated with knowing that someone is using all of their personal information to charge any manner of goods. As a result of identity theft, victims have been turned down for jobs, mortgages, and other important extensions of credit.

Identity theft is becoming a growing concern for millions of Americans. The Federal Trade Commission today will testify that their new hotline receives an average of 1,000 calls per week, 600 from actual victims.

This is an equal opportunity crime with victims of all ages, incomes, and races. Regardless, the effects can be devastating to the victims. Take, for example, Shon Boulden from Hillsboro, Oregon, who you will be hearing from today.

Shon has had dozens of accounts opened up under his Social Security number. As a result Shon has spent countless hours battling to clear up his good name. Now at the young age of 23 years old, Shon is unable to get the kind of credit a young person needs to start off in life-- including credit card loans, business loans, or private student loans.

While the consequences can be dire for the young, this crime can be devastating to the elderly who are especially vulnerable. A few months ago I spoke a constituent whose 96 year old mother had her checks, a credit card, and her drivers' license stolen.

With her drivers license and account number the thieves were able to cash multiple checks in her name. She and her son investigated with the bank, which opened new accounts for her. But it didn't end there.

Even though she canceled her credit card and opened a new one, the thieves were able to transfer $12,000 from her Visa card to a bank in Ann Arbor, MI. I should note that this woman has never been to Ann Arbor, nor has she ever had anything close to that kind of a balance on that card

This constituent was lucky enough to have a son to help her navigate through the maze of opening and closing accounts, dealing with banks and credit card companies and credit bureaus.

But many elderly don't have children near by, are in poor health, and financially unstable. Therefore, these crimes do not just aggravate-- they cause tremendous fear. People fear not only the criminals themselves, but the harassing phone calls and threatening letters from collection agencies.

In introducing the Identity Theft Protection Act we are asking credit issuers and credit reporters to do their part in making sure that credit is extended to the right person-- and in the case of fraud we are asking for procedures to be put into place to assure that consumers can clear up their good names quickly.

For instance, the legislation requires that any time a creditor receives a change of address form, the creditor send back a confirmation to both the new and old addresses. That way, if a thief attempts to change a victim's address, the victim will know about it.

It asks credit bureaus to investigate discrepancies in the names and addresses they have on file with names and addresses provided by a credit issuer.

H.R. 4311 codifies the practice of placing fraud alerts on a consumers credit files and allows a consumer to require verification before credit is extended. The bill gives the FTC the authority to impose fines against credit issuers that ignore the fraud alert.

This legislation also gives consumers more access to the personal information collected about them-- which is a critical tool in combating identity theft-- by requiring that every consumer a cross the nation have access to one free credit report annually.

This bill also restricts the sale of Social Security numbers by credit bureaus. Increasingly the Social Security Number is becoming a national ID and the key to identity theft.

I want to reiterate that I fully understand that in most cases of identity theft, the victims recoup 100% of their financial losses and I applaud credit issuers for not further punishing victims.

However, I believe that credit issuers and credit bureaus must recognize the problem this creates for consumers. The son of the 96 year old victim told me that his mother's bank "just didn't seem to care". As they saw it, she didn't lose money, so she shouldn't be upset. Mr. Chairman-- I don't see it that way.

Our bill has common sense reforms. It asks credit bureaus to honor fraud alert requests for all inquiries, forces credit issuers to observe those alerts, gives customers a notice when their billing addresses are changed, and forces credit bureaus to at least look into discrepancies. In my mind this is the least we can ask of those companies-- who profit in both extending credit and trading in our credit histories-- to do to protect us.