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

[nicknameless]

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
[phone]

:patriot: CA State Senator Debra Bowen :patriot:

[rodeodance]

1. what the heck are they THINKING?

[nicknameless]

2. What are they thinking?

Probably:

"Mmmmmmmm, more corporate $$$$$$$$$$$$"

They always toss out that slimy accusation about Progressives hating 'murka.
I want to know why *they* hate Americans.

[EFerrari]

7. Kick

:kick:

[hang a left]

3. Can someone explain who profits from identity theft .

I am at a loss.

[nicknameless]

4. Besides the identity thieves?

It isn't that business will profit from id theft, it's that they can profit from not having to deal with hurtles to open credit accounts and ring up purchases.

The other protection they're trying to overturn is the notification to consumers whose id info may have been compromised somehow by a business. It damages the business' reputation and can cost them $$$.

[BlooInBloo]

5. The credit companies....

... if they don't have to spend the energy, resources, and money to implement substantial security.

... Combined with the bankruptcy laws, and massive redtape headaches involved with setting your credit straight, the credit companies are FAR better off with the high spending that comes from ID theft.

[hang a left]

6. But can't you dispute charges on credit cards

and prove you did not make them and therefore don't have to pay them?? If someone uses your identity to buy a car, for instance, can't you prove that you didn't buy the car?? I don't get it.

[nicknameless]

8. You can dispute charges, but the businesses feel that they still come out

ahead financially. It's worth the risk to them. (More profits than losses)

Meanwhile, it takes individuals who have been the victim of id theft an average of 200+ days to straighten the mess out.

[hang a left]

9. That doesn't make sense to me.

It seems to me that they would be out of the product and the payment.

It has to be the access. Someone wants to have access to the personal information. And they are willing to pay a lobbyist to get it.

I could be wrong. It just doesn't make any sense.

[nicknameless]

10. It doesn't make sense to you because you aren't a corporate thug.

It's all about their bottom line.
They feel that they make more money selling to individuals, without having to verify their identity, than they lose.
How much are they allowed to write off as business loses? All of the losses caused by id theft?
If they didn't feel that they came out ahead by not having to verify, they wouldn't be seeking Federal assistance to overturn CA laws.

[hang a left]

11. OK gotcha...eom

[BlooInBloo]

13. I said "massive redtape headaches" to pre-empt your response...

... apparently it didn't catch so well...

It's similar to rebates. You may say, by analogy, "well can't you just send in your rebate form?". Yes. And if everyone did so, the companies would be on the hook for every singe one of them. After all the customers bugged them long enough. After all the customers provided further documentation verifying their elegibility. After....

The basic fact, which companies know full well, is that only a percentage of people actually make full use of rebates - for a variety of reasons. Hence the companies come out ahead.

In the case of ID theft, as long as there are no penalties to credit-producers for lax security, it will be in their interest to not provide security. I can quickly think of two primary sources of penalties. 1) Being on the hook for the customers' losses. I think this is roughly similar to the rebate situation, described above, and that the banks believe they won't be stuck with the entire bill. 2) Legal penalties of the "lack of due diligence" sort. That's why they have lobbyists, to make sure no such legal penalties exist. I wouldn't be surprised if in fact there were already laws on the books having the effect that banks shall not be liable for lack of security.

If nothing else, realize: if it were in the credit companies' interests to do it, they would - they're smart people, just misanthropic.

[nicknameless]

12. EVERYONE: PLEASE urge your Congress Rep to reject this bill: H.R. 3997

I should have highlighted that in the OP.

All House Representatives will be voting on this bill in Congress. Please ask that they vote NO.

[nicknameless]

14. Kick

[EFerrari]

15. Kick