Congress Thugs Want to End California's Identity Theft Prevention Measures

Bowen Laments Congressional Drive To Undo ID Theft Prevention Laws

CONGRESS POISED TO PULL THE RUG OUT FROM UNDER
CALIFORNIA’S LANDMARK IDENTITY THEFT PREVENTION LAWS

SECURITY FREEZE AND BREACH NOTICE LAWS ON THE CHOPPING BLOCK

SACRAMENTO – As Congress debates a plan to gut California’s landmark credit report freeze and security breach notice laws, California State Senator Debra Bowen (D-Redondo Beach) renewed her call for national laws that give all Americans the right to freeze access to their credit reports and the right to be told when their personal information is exposed in a corporate or government security breach. H.R. 3997, which Congress is expected to vote on tomorrow, creates a weak federal law that preempts California’s strong laws on two fronts. First, it only allows people to freeze their credit reports – widely touted as the most effective identity theft prevention tool – after they’ve become an identity theft victim. Second, it only requires businesses to notify their customers when a security breach happens if the breach is “likely to result in substantial harm.”

“Congress is poised to strip Californians of their right to place a freeze on their credit report, the most important tool people have to protect themselves from becoming an identity theft victim, all in the name of creating a national standard,” said Senator Bowen, who is the author of several of California’s identity theft prevention laws, including SB 168, which created the first credit report freeze law in the nation in 2001. “Privacy is the number one concern of most Americans. I don’t see how making life easier for would-be identity thieves, as Congress seems intent on doing, and setting the identity theft prevention efforts back five years does anything to help people protect their privacy.”

California has been a national leader in identity theft prevention, enacting ground-breaking laws in 2001, 2002, and 2003 to ban Social Security numbers from being used as public identifiers, give people the right to freeze access to their credit reports, and require notice to victims of security breaches. Unfortunately, Congress has a history of preempting California’s strong consumer protection laws and H.R. 3997 is just the latest case in point. For example, Congress passed the Fair & Accurate Credit Transaction (FACT) Act of 2003, which contained a number of provisions that were weaker than California’s financial privacy laws, and the Ninth Circuit Court of Appeals ruled in 2005 that the FACT Act preempted the opt-in “affiliate-sharing” provisions of SB 1 (Speier), California’s Financial Information Privacy Act (American Bankers Association v. Gould, 412 F.3d 1081 (9th Cir. 2005)). Congress also passed the CAN-SPAM Act of 2003 which set an opt-out standard for spam and specifically preempted California’s opt-in spam law .

“Preventing people from freezing access to their credit reports unless they’re an identity theft victim is a little like saying people can’t buy flood insurance until their house is six feet underwater,” continued Bowen. “The whole purpose of the freeze is to let people take a pro-active, preventative step to ensure they don’t get ripped off. Why Congress wants to tell people, ‘Hey, there’s this great thing that will help you from becoming an identity theft victim, but you can only use it if your identity has been stolen and the thief has racked up thousands of dollars worth of bills in your name’ is beyond me.”

The FTC received 255,565 identity theft complaints in 2005, according to the January 2006 Consumer Sentinel report by the FTC:

+ Nationwide, identity theft complaints grew only 3.5% between 2004 and 2005.
+ In California, identity theft complaints grew only 3% between 2004 and 2005.
+ California ranked third behind Arizona and Nevada in per capita identity theft in 2005.
+ Despite California’s overall downward trend, the state still holds four of the top ten slots and six of the top twenty slots in per capita identity theft-related complaints by metro area:

1) Phoenix-Mesa-Scottsdale, AZ

2) Las Vegas-Paradise, NV

3) Riverside-San Bernardino-Ontario, CA (146 victims per 100,000) (dropped from #2 in 2004)

4) Dallas-Fort Worth-Arlington, TX

5) Los Angeles-Long Beach-Santa Ana, CA (135 per 100,000) (rose from #6 in 2004)

6) Miami-Fort Lauderdale-Miami Beach, FL

7) San Francisco-Oakland-Fremont, CA (131 per 100,000) (rose from #9 in 2004)

8) Houston-Baytown-Sugar Land, TX

9) San Diego-Carlsbad-San Marcos, CA (121 per 100,000) (rose from #10 in 2004)

10) San Antonio, TX

14) Sacramento-Arden-Arcade-Roseville, CA (114 per 100,000) (dropped from #13 in 2004)

18) San Jose-Sunnyvale-Santa Clara, CA (103 per 100,000) (rose from #24 in 2004)

The entire FTC study can be found at: http://www.consumer.gov/sentinel/pubs/Top10Fraud2005.pdf.

The FTC study shows the incidence of identity theft is slowing dramatically, and in California, the trend is even stronger. Nationally, identity theft grew by only 3.5% in 2005, while it grew by 15% in 2004 and by 33% in 2003. In California, identity theft grew by only 3% in 2005 after growing by 11% in 2004 and by 28% in 2003, according to the new FTC study.

“Clearly some of the identity theft prevention laws we’ve put on the books are starting to have an effect, which means now certainly isn’t the time to start weakening the protections we’ve set up for Californians as many folks in Congress are looking to do,” concluded Bowen. “The security freeze lets you lock down your credit history so criminals can’t assume your name, get approved for loans and credit cards based on your good credit rating, and then send the collection agencies chasing after you. The freeze lets you maintain control over something you probably never thought you’d be in danger of losing – your good name.”

This week, Senator Bowen is circulating a letter among her colleagues in the Legislature that will be sent to the members of the California congressional delegation, urging them to pass strong identity theft prevention laws that don’t preempt or weaken California’s laws.


CONTACT: Jennie Bretschneider
(916) 651-4028