II

106TH CONGRESS

2D SESSION S. 2328

To prevent identity fraud in consumer credit transactions and credit reports,

and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 30, 2000

Mrs. FEINSTEIN (for herself, 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 fraud in consumer credit transactions

and credit reports, 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 2000’’.

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

3 (2) the United States Postal Inspection Service

4 estimates that 50,000 people a year have become

5 victims of identity theft since the mid-1990’s;

6 (3) the United States Secret Service inves7 tigated identity theft losses to individuals and insti8 tutions of $745,000,000 in 1997, a 75 percent in9 crease over the $442,000,000 lost in 1995;

10 (4) according to TransUnion Corporation, a na11 tional credit bureau, the total number of identity

12 theft inquiries to its Fraud Victim Assistance De13 partment grew from 35,235 in 1992 to 522,922 in

14 1997;

15 (5) an integral part of many identity crimes is

16 the fraudulent acquisition of the social security num17 ber of an individual;

18 (6) credit issuers, credit reporting agencies, and

19 other organizations with access to sensitive personal

20 data have an obligation to handle such information

21 responsibly, and should take affirmative steps to

22 prevent identity criminals from intercepting such in23 formation;

24 (7) identity theft causes extraordinary damage

25 to its victims, jeopardizing their access to needed
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1 credit and forcing many to spend years trying to re2 store their good name;

3 (8) the resources available to identity theft vic4 tims are inadequate, and both the private sector and

5 Federal agencies should provide better and more

6 sympathetic assistance to such victims;

7 (9) credit reporting agencies and credit issuers

8 should have uniform reporting requirements and ef9 fective fraud alerts to assist identity theft victims in

10 repairing and protecting their credit; and

11 (10) consumers need greater access to informa12 tion that is collected about them so they can quickly

13 identify fraudulent activity.

14 SEC. 3. CHANGES OF ADDRESS.

15 (a) DUTY OF ISSUERS OF CREDIT.—Section 132 of

16 the Truth in Lending Act (15 U.S.C. 1642) is amended—

17 (1) by inserting ‘‘(a) IN GENERAL.—’’ before

18 ‘‘No credit’’; and

19 (2) by adding at the end the following:

20 ‘‘(b) CONFIRMATION OF CHANGES OF ADDRESS.—

21 ‘‘(1) IN GENERAL.—Not later than 10 days

22 after receiving notification from a cardholder of a

23 change of address, a card issuer shall send to the

24 cardholder, both to the new address and to the
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1 former address thereof, written confirmation of that

2 change of address.

3 ‘‘(2) NOTIFICATION OF REQUEST FOR ADDI4 TIONAL CARDS.—If a card issuer receives a request

5 for an additional credit card with respect to an exist6 ing credit account not later than 30 days after re7 ceiving notification of a change of address for that

8 account, the card issuer shall notify the cardholder

9 of the request at both the new address and the

10 former address.’’.

11 (b) DUTY OF CONSUMER REPORTING AGENCIES.—

12 Section 605 of the Fair Credit Reporting Act (15 U.S.C.

13 1681c) is amended by adding at the end the following:

14 ‘‘(g) NOTICE OF POTENTIAL FRAUD.—A consumer

15 reporting agency shall notify each user of a consumer re16 port that is a creditor (as defined in section 103 of the

17 Truth in Lending Act) if the agency becomes aware that

18 an application to the card issuer to open a new credit card

19 account bears an address for the consumer that is dif20 ferent from the address in the file of the consumer.’’.

21 (c) ENFORCEMENT.—

22 (1) FEDERAL TRADE COMMISSION.—Except as

23 provided in paragraph (2), compliance with section

24 132(b) of the Truth in Lending Act (as added by

25 this section) shall be enforced by the Federal Trade
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1 Commission in the same manner and with the same

2 power and authority as the Commission has under

3 the Fair Debt Collection Practices Act to enforce

4 compliance with that Act.

5 (2) OTHER AGENCIES IN CERTAIN CASES.—

6 (A) IN GENERAL.—Compliance with sec7 tion 132(b) of the Truth in Lending Act (as

8 added by this section) shall be enforced under—

9 (i) section 8 of the Federal Deposit

10 Insurance Act, in the case of a card issuer

11 that is—

12 (I) a national bank or a Federal

13 branch or Federal agency of a foreign

14 bank, by the Office of the Comptroller

15 of the Currency;

16 (II) a member bank of the Fed17 eral Reserve System (other than a na18 tional bank), a branch or agency of a

19 foreign bank (other than a Federal

20 branch, Federal agency, or insured

21 State branch of a foreign bank), a

22 commercial lending company owned or

23 controlled by a foreign bank, or an or24 ganization operating under section 25

25 or 25A of the Federal Reserve Act, by
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1 the Board of Governors of the Federal

2 Reserve System;

3 (III) a bank insured by the Fed4 eral Deposit Insurance Corporation

5 (other than a member of the Federal

6 Reserve System or a national non7 member bank) or an insured State

8 branch of a foreign bank, by the

9 Board of Directors of the Federal De10 posit Insurance Corporation; and

11 (IV) a savings association, the

12 deposits of which are insured by the

13 Federal Deposit Insurance Corpora14 tion, by the Director of the Office of

15 Thrift Supervision; and

16 (ii) the Federal Credit Union Act, by

17 the Administrator of the National Credit

18 Union Administration in the case of a card

19 issuer that is a Federal credit union, as

20 defined in that Act.

21 (3) VIOLATIONS TREATED AS VIOLATIONS OF

22 OTHER LAWS.—For the purpose of the exercise by

23 any agency referred to in this subsection of its pow24 ers under any Act referred to in this subsection, a

25 violation of section 132(b) of the Truth in Lending
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1 Act (as added by this section) shall be deemed to be

2 a violation of a requirement imposed under that Act.

3 In addition to its powers under any provision of law

4 specifically referred to in paragraph (1) or (2), each

5 of the agencies referred to in those paragraphs may

6 exercise, for the purpose of enforcing compliance

7 with section 132(b) of the Truth in Lending Act (as

8 added by this section), any other authority conferred

9 on such agency by law.

10 SEC. 4. FRAUD ALERTS.

11 Section 605 of the Fair Credit Reporting Act (15

12 U.S.C. 1681c) is amended by adding at the end the fol13 lowing:

14 ‘‘(h) FRAUD ALERTS.—

15 ‘‘(1) IN GENERAL.—Upon the request of a con16 sumer, a consumer reporting agency shall include a

17 fraud alert in the file of that consumer.

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

19 agency shall notify each person procuring consumer

20 credit information with respect to a consumer of the

21 existence of a fraud alert in the file of that con22 sumer, regardless of whether a full credit report,

23 credit score, or summary report is requested.

24 ‘‘(3) PENALTIES.—Any consumer reporting

25 agency that fails to comply with this subsection, and
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1 any user of a consumer report that fails to comply

2 with preauthorization procedures contained in a

3 fraud alert and issues or extends credit in the name

4 of the consumer to a person other than the con5 sumer, shall be in violation of this section.

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

7 ‘fraud alert’ means a clear and conspicuous state8 ment in the file of a consumer that notifies all pro9 spective users of a consumer report made with re10 spect to that consumer that the consumer does not

11 authorize the issuance or extension of credit in the

12 name of the consumer unless—

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

14 verbal authorization from the consumer at a

15 telephone number designated by the consumer;

16 or

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

18 method of preauthorization by the consumer as

19 is mutually agreed upon by the consumer and

20 the consumer reporting agency.’’.

21 SEC. 5. REGULATIONS ON DUTY TO INVESTIGATE.

22 Not later than 6 months after the date of enactment

23 of this Act, the Federal Trade Commission shall promul24 gate regulations to require each consumer reporting agen25 cy (as defined in section 603 of the Fair Credit Reporting
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1 Act) to investigate discrepancies between personal or iden2 tifying information contained in the file maintained by the

3 agency with respect to a consumer and in the personal

4 and identifying information supplied to the agency by the

5 user of the consumer report.

6 SEC. 6. FREE REPORTS ANNUALLY.

7 Section 612(c) of the Fair Credit Reporting Act (15

8 U.S.C. 1681j(c)) is amended to read as follows:

9 ‘‘(c) FREE ANNUAL DISCLOSURE.—Upon the request

10 of the consumer, a consumer reporting agency shall make

11 all disclosures pursuant to section 609 once during any

12 12-month period without charge to the consumer.’’.

13 SEC. 7. IDENTIFYING INFORMATION.

14 (a) LIMITATION.—The Fair Credit Reporting Act (15

15 U.S.C. 1601 et seq.) is amended—

16 (1) by redesignating section 624 (15 U.S.C.

17 1681t, as so designated by Public Law 104–208) as

18 section 626 and moving that section to the end of

19 the Act;

20 (2) by redesignating section 624 (15 U.S.C.

21 1681u, as added by Public Law 104–93) as section

22 625; and

23 (3) by inserting after section 623 the following:
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1 ‘‘SEC. 624. OTHER IDENTIFYING INFORMATION.

2 ‘‘Except as provided in section 608, a consumer re3 porting agency may furnish consumer identifying informa4 tion, other than the name, generational designation, and

5 current address of the consumer, only in a consumer re6 port.’’.

7 (b) DISCLOSURES TO GOVERNMENTAL AGENCIES.—

8 Section 608 of the Fair Credit Reporting Act (15 U.S.C.

9 1681f) is amended by striking ‘‘section 604’’ and inserting

10 ‘‘sections 604 and 623’’.

11 (c) PERMISSIBLE PURPOSES.—Section 604(a) of the

12 Fair Credit Reporting Act (15 U.S.C. 1681b(a)) is amend13 ed in the matter preceding paragraph (1) by inserting ‘‘or

14 any identifying information (other than the name,

15 generational designation, or current address of the con16 sumer)’’ after ‘‘a consumer report’’.

17 SEC. 8. INDIVIDUAL REFERENCE SERVICES.

18 (a) IN GENERAL.—An individual reference services

19 provider shall, upon request and proper identification of

20 a consumer—

21 (1) clearly and accurately disclose to the con22 sumer the nature, content, and substance of all in23 formation in the file maintained by the provider with

24 respect to the consumer at the time of the request

25 that is obtainable based upon the identifying infor-
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1 mation supplied by the consumer when making such

2 request; and

3 (2) if the consumer has made a written request,

4 deliver a written copy or photocopy of all informa5 tion described in paragraph (1), together with a

6 clear, simple, and plain meaning explanation of the

7 information provided under this subsection, in a

8 readable format and type, which shall in no case be

9 smaller than 10 point type.

10 (b) INDIVIDUAL REFERENCE SERVICES PROVIDER

11 DEFINED.—

12 (1) IN GENERAL.—In this section, the term ‘‘in13 dividual reference services provider’’—

14 (A) means any person that, for monetary

15 fees, dues, or on a cooperative nonprofit basis,

16 regularly engages in the practice of creating,

17 assembling, evaluating, or providing informa18 tion, either directly or as a supplier to others,

19 with respect to any person regarding any 2 or

20 more items of information described in para21 graph (2); and

22 (B) does not include the Federal Govern23 ment or any State government or political sub24 division thereof.
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1 (2) TYPES OF INFORMATION.—The items of in2 formation described in this paragraph are—

3 (A) social security number or other social

4 security information;

5 (B) mother’s maiden name;

6 (C) prior address;

7 (D) birth date;

8 (E) criminal history;

9 (F) history of civil actions;

10 (G) driving records;

11 (H) vehicle information;

12 (I) past employment history;

13 (J) income level;

14 (K) tax records;

15 (L) history of voter registration; and

16 (M) other similar information, as deter17 mined by the Federal Trade Commission.

18 SEC. 9. EXTENSION OF THE CIVIL MONETARY PENALTY AU19 THORITY.

20 (a) IN GENERAL.—Section 1129(a) of the Social Se21 curity Act (42 U.S.C. 1320a–8(a)) is amended—

22 (1) by striking ‘‘(A)’’, ‘‘(B)’’, and ‘‘(C)’’ and in23 serting ‘‘(i)’’, ‘‘(ii)’’, and ‘‘(iii)’’, respectively;

24 (2) by striking ‘‘(a)(1)’’ and inserting

25 ‘‘(a)(1)(A)’’;
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1 (3) by striking ‘‘(2)’’ and inserting ‘‘(B)’’; and

2 (4) by adding at the end the following new

3 paragraph:

4 ‘‘(2) Any person (including an organization, agency,

5 or other entity) who—

6 ‘‘(A) having received, while acting in the capac7 ity as representative payee pursuant to section

8 205(j) or section 1631(a)(2), a payment under title

9 II or title XVI for the use and benefit of another in10 dividual, converts such payment, or any part thereof,

11 to a use that such person knows or should know is

12 other than for the use and benefit of such other in13 dividual; or

14 ‘‘(B) uses a social security account number that

15 such person knows or should know has been as16 signed by the Commissioner of Social Security (pur17 suant to an exercise of authority under section

18 205(c)(2) to establish and maintain records) on the

19 basis of false information furnished to the Commis20 sioner of Social Security by any individual; or

21 ‘‘(C) falsely represents a number to be the so22 cial security account number assigned by the Com23 missioner of Social Security to any individual, when

24 such person knows or should know that such number

25 is not the social security account number assigned
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1 by the Commissioner of Social Security to such indi2 vidual; or

3 ‘‘(D) knowingly alters a social security card

4 issued by the Commissioner of Social Security, or

5 possesses such a card with intent to alter it; or

6 ‘‘(E) knowingly buys or sells a card that is, or

7 purports to be, a card issued by the Commissioner

8 of Social Security, or possesses such a card with in9 tent to buy or sell it; or

10 ‘‘(f) counterfeits a social security card, or pos11 sesses a counterfeit card with intent to buy or sell

12 it; or

13 ‘‘(G) discloses, uses, or compels the disclosure

14 of the social security account number of any person

15 in violation of the laws of the United States

16 shall be subject to, in addition to any other penalties that

17 may be prescribed by law, a civil money penalty of not

18 more than $5,000 for each such violation.’’.

19 (b) CONFORMING AMENDMENTS.—

20 (1) Section 1129(b)(3)(A) of the Social Secu21 rity Act (42 U.S.C. 1320a–8(b)(3)(A)) is amended

22 by striking ‘‘charging fraud or false statements’’.

23 (2) Section 1129(c)(1) of such Act (42 U.S.C.

24 1320a–8(c)(1)) is amended by striking ‘‘and rep-
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1 resentations’’ and inserting ‘‘, representations, or ac2 tions’’.

3 (3) Section 1129(e)(1)(A) of such Act (42

4 U.S.C. 1320a–8(e)(1)(A)) is amended by striking

5 ‘‘statement or representation referred to in sub6 section (a) was made’’ and inserting ‘‘violation oc7 curred’’.

8 (4) Section 1129(l) of such Act (42 U.S.C.

9 1320a–8(l)) is amended by inserting ‘‘assignment of

10 a social security account number or’’ after ‘‘applica11 tion of an individual for’’.

12 (c) EFFECTIVE DATE.—The amendments made by

13 this section shall be effective with respect to violations

14 committed after the date of enactment of this Act.

15 SEC. 10. MODEL FORMS.

16 (a) IN GENERAL.—Six months after the date of en17 actment of this Act, the Federal Trade Commission shall

18 develop a model form and standard procedures to be used

19 by consumers that are victims of identity fraud in con20 tacting and informing creditors and credit reporting agen21 cies of such fraud, if the Commission determines, at that

22 time, that issuers of credit and credit reporting agencies

23 have failed to jointly develop such a model form and stand24 ard procedures.
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1 (b) CONTENTS.—A model form developed under sub2 section (a) (by the Commission or the issuers and agencies

3 referred to therein) shall require information necessary to

4 demonstrate the fraudulent activity done in the name of

5 the consumer to whom the form relates, including, if

6 applicable—

7 (1) a notarized affidavit or police report relat8 ing to the activity;

9 (2) a notarized handwriting sample; and

10 (3) any other relevant documentation.

Æ