II

107TH CONGRESS

1ST SESSION S. 1399

To prevent identity theft, and for other purposes.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 4, 2001

Mrs. FEINSTEIN (for herself, Mr. SHELBY, Mr. CORZINE, Mr. KYL, and Mr.

GRASSLEY) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To prevent identity theft, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Identity Theft Preven5 tion Act of 2001’’.

6 SEC. 2. FINDINGS.

7 Congress finds that—

8 (1) the crime of identity theft has become one

9 of the major law enforcement challenges of the new

10 economy, as vast quantities of sensitive, personal in-
2

•S 1399 IS

1 formation are now vulnerable to criminal intercep2 tion and misuse;

3 (2) a number of indicators reveal that, despite

4 increased public awareness of the crime, the inci5 dents of identity theft continue to rise;

6 (3) 1,000,000 consumers annually call the

7 Fraud Victim Assistance Department of one national

8 consumer reporting agency, a number that almost

9 doubled from 1997 to 2001;

10 (4) as of March 2001, the Federal Trade Com11 mission Identity Theft Data Clearinghouse was aver12 aging more than 2,000 call-ins a week, a four-fold

13 increase since the Clearinghouse began operation in

14 November 1999;

15 (5) allegations of identity theft reported to the

16 fraud hotline of the Social Security Administration

17 increased from 11,058 in fiscal year 1998 to 46,480

18 in fiscal year 2000;

19 (6) in its fiscal year 2000 annual report, the

20 Postal Inspection Service noted that identity theft is

21 a growing trend and the agency’s investigations of

22 such crimes has ‘‘increased by 67 percent since last

23 year’’;

24 (7) an integral part of many identity crimes in25 volves the interception of personal financial data or
3

•S 1399 IS

1 the fraudulent acquisition of credit cards and other

2 financial products in another person’s name;

3 (8) identity theft is an act that violates the pri4 vacy of our citizens and ruins their good names, vic5 tims can suffer restricted access to credit and dimin6 ished employment opportunities, and may spend

7 years repairing damage to credit histories;

8 (9) the resources available to identity theft vic9 tims are inadequate, and both private sector and

10 Federal agencies should provide better and more

11 sympathetic assistance to such victims; and

12 (10) credit reporting agencies and issuers of

13 credit should have uniform reporting requirements

14 and effective fraud alerts to assist identity theft vic15 tims in repairing and protecting their credit.

16 SEC. 3. IDENTITY THEFT PREVENTION.

17 (a) CHANGES OF ADDRESS.—

18 (1) DUTY OF ISSUERS OF CREDIT.—Section

19 132 of the Truth in Lending Act (15 U.S.C. 1642)

20 is amended—

21 (A) by inserting ‘‘(a) IN GENERAL.—’’ be22 fore ‘‘No credit’’; and

23 (B) by adding at the end the following:

24 ‘‘(b) CONFIRMATION OF CHANGES OF ADDRESS.—If

25 a card issuer receives a request for an additional credit
4

•S 1399 IS

1 card with respect to an existing credit account not later

2 than 30 days after receiving notification of a change of

3 address for that account, the card issuer shall—

4 ‘‘(1) not later than 5 days after sending the ad5 ditional card to the new address, notify the card6 holder of the request at both the new address and

7 the former address; and

8 ‘‘(2) provide to the cardholder a means of

9 promptly reporting incorrect changes.’’.

10 (2) DUTY OF CONSUMER REPORTING AGEN11 CIES.—Section 605 of the Fair Credit Reporting Act

12 (15 U.S.C. 1681c) is amended by adding at the end

13 the following:

14 ‘‘(g) NOTICE OF POTENTIAL FRAUD.—In any case

15 in which a person has requested a consumer report relat16 ing to a consumer, and the request includes an address

17 for the consumer that is a different location from the most

18 recent address in the file of the consumer, the consumer

19 reporting agency shall notify the requester of the discrep20 ancy.’’.

21 (3) ENFORCEMENT.—

22 (A) FEDERAL TRADE COMMISSION.—Ex23 cept as provided in subparagraph (B), compli24 ance with section 132(b) of the Truth in Lend25 ing Act (as added by this subsection) shall be
5

•S 1399 IS

1 enforced by the Federal Trade Commission in

2 the same manner and with the same power and

3 authority as the Commission has under the

4 Fair Debt Collection Practices Act to enforce

5 compliance with that Act.

6 (B) OTHER AGENCIES IN CERTAIN

7 CASES.—

8 (i) IN GENERAL.—Compliance with

9 section 132(b) of the Truth in Lending Act

10 (as added by this subsection) shall be en11 forced under—

12 (I) section 8 of the Federal De13 posit Insurance Act, in the case of a

14 card issuer that is—

15 (aa) a national bank or a

16 Federal branch or Federal agen17 cy of a foreign bank, by the Of18 fice of the Comptroller of the

19 Currency;

20 (bb) a member bank of the

21 Federal Reserve System (other

22 than a national bank), a branch

23 or agency of a foreign bank

24 (other than a Federal branch,

25 Federal agency, or insured State
6

•S 1399 IS

1 branch of a foreign bank), a com2 mercial lending company owned

3 or controlled by a foreign bank,

4 or an organization operating

5 under section 25 or 25A of the

6 Federal Reserve Act, by the

7 Board of Governors of the Fed8 eral Reserve System;

9 (cc) a bank insured by the

10 Federal Deposit Insurance Cor11 poration (other than a member of

12 the Federal Reserve System or a

13 national nonmember bank) or an

14 insured State branch of a foreign

15 bank, by the Board of Directors

16 of the Federal Deposit Insurance

17 Corporation; and

18 (dd) a savings association,

19 the deposits of which are insured

20 by the Federal Deposit Insurance

21 Corporation, by the Director of

22 the Office of Thrift Supervision;

23 and

24 (II) the Federal Credit Union

25 Act, by the Administrator of the Na-
7

•S 1399 IS

1 tional Credit Union Administration in

2 the case of a card issuer that is a

3 Federal credit union, as defined in

4 that Act.

5 (C) VIOLATIONS TREATED AS VIOLATIONS

6 OF OTHER LAWS.—For the purpose of the exer7 cise by any agency referred to in this paragraph

8 of its powers under any Act referred to in this

9 paragraph, a violation of section 132(b) of the

10 Truth in Lending Act (as added by this sub11 section) shall be deemed to be a violation of a

12 requirement imposed under that Act. In addi13 tion to its powers under any provision of law

14 specifically referred to in subparagraph (A) or

15 (B), each of the agencies referred to in those

16 subparagraphs may exercise, for the purpose of

17 enforcing compliance with section 132(b) of the

18 Truth in Lending Act (as added by this sub19 section), any other authority conferred on such

20 agency by law.

21 (b) FRAUD ALERTS.—Section 605 of the Fair Credit

22 Reporting Act (15 U.S.C. 1681c) is amended by adding

23 at the end the following:

24 ‘‘(h) FRAUD ALERTS.—
8

•S 1399 IS

1 ‘‘(1) IN GENERAL.—Upon the request of a con2 sumer and upon receiving proper identification, a

3 consumer reporting agency shall include a fraud

4 alert in the file of that consumer.

5 ‘‘(2) NOTICE TO USERS.—A consumer reporting

6 agency shall notify each person procuring consumer

7 credit information with respect to a consumer of the

8 existence of a fraud alert in the file of that con9 sumer, regardless of whether a full credit report,

10 credit score, or summary report is requested.

11 ‘‘(3) PENALTIES.—Any user of a consumer re12 port that fails to comply with preauthorization pro13 cedures contained in a fraud alert and issues or ex14 tends credit in the name of the consumer to a per15 son other than the consumer, shall be in violation of

16 this section.

17 ‘‘(4) DEFINITION.—In this subsection, the term

18 ‘fraud alert’ means a clear and conspicuous state19 ment in the file of a consumer that notifies all pro20 spective users of a consumer report made with re21 spect to that consumer that the consumer does not

22 authorize the issuance or extension of credit in the

23 name of the consumer unless—

24 ‘‘(A) the issuer of such credit first obtains

25 verbal authorization from the consumer at a
9

•S 1399 IS

1 telephone number designated by the consumer;

2 or

3 ‘‘(B) the issuer complies with such other

4 method of preauthorization by the consumer as

5 is mutually agreed upon by the consumer and

6 the consumer reporting agency.’’.

7 (c) RULES ON COMPLAINT REFERRAL, INVESTIGA8 TIONS, AND INQUIRIES.—Not later than 270 days after

9 the date of enactment of this Act, the Federal Trade Com10 mission (in this subsection referred to as the ‘‘Commis11 sion’’) shall promulgate rules in accordance with section

12 553 of title 5, United States Code—

13 (1) to require each consumer reporting agency

14 (as defined in section 603 of the Fair Credit Report15 ing Act) to investigate discrepancies between per16 sonal or identifying information contained in the file

17 maintained by the agency with respect to a con18 sumer and in the personal and identifying informa19 tion supplied to the agency by the user of the con20 sumer report; and

21 (2) to develop procedures for referral of con22 sumer complaints about identity theft and fraud

23 alerts between and among the consumer reporting

24 agencies and the Commission.
10

•S 1399 IS

1 SEC. 4. TRUNCATION OF CREDIT CARD ACCOUNT NUM2 BERS.

3 (a) IN GENERAL.—Except as provided in this section,

4 no person, firm, partnership, association, corporation, or

5 limited liability company that accepts credit cards for the

6 transaction of business shall print more than the last 5

7 digits of the credit card account number or the expiration

8 date upon any receipt provided to the cardholder.

9 (b) LIMITATION.—This section applies only to re10 ceipts that are electronically printed, and does not apply

11 to transactions in which the sole means of recording the

12 person’s credit card account number is by handwriting or

13 by an imprint or copy of the credit card.

14 (c) EFFECTIVE DATE.—This section shall become ef15 fective on—

16 (1) January 1, 2006, with respect to any cash

17 register or other machine or device that electroni18 cally prints receipts for credit card transactions that

19 is in use before January 1, 2003; and

20 (2) January 1, 2003, with respect to any cash

21 register or other machine or device that electroni22 cally prints receipts for credit card transactions that

23 is first put into use on or after January 1, 2003.

24 (d) EFFECT ON STATE LAW.—Nothing in this sec25 tion prevents a State from imposing requirements that are

26 the same or substantially similar to the requirements of
11

•S 1399 IS

1 this section at any time before the effective date of this

2 section.

Æ