House Approves Landmark Identity Theft Protections

September 11, 2003

By a vote of 392-30, the House of Representatives have approved landmark legislation to give consumers new tools to fight the rapidly growing crime of identity theft.   According to an FTC study released last week, nearly 10 million Americans were victimized by identity thieves last year, costing consumers and businesses over $50 billion.

H.R. 2622, the Fair and Accurate Credit Transactions Act, [pdf] sponsored by House Financial Institutions Chairman Spencer Bachus (AL), Rep. Darlene Hooley (OR), Rep. Judy Biggert (IL), and Rep. Dennis Moore (KS), boasts such consumer friendly provisions as free access to credit reports and a new fraud alert system to give consumers greater protection from identity thieves.

?Consumers rely on affordable access to credit,? House Financial Services Committee Chairman Michael G. Oxley (OH) said.  ?When identity thieves strike, they take away that access and ruin the lives of their victims.   This bill will give those victims the ability to clear their names and realize the dreams they have for their families.?

?This bill has great consumer protections so we can reduce the number of identity theft victims and make it easier for those who've been victimized to restore their credit,? Rep. Steve LaTourette (OH) said.

?For far too long, identify thieves have had the upper hand and managed to stay one step ahead of consumers, credit card companies and even law enforcement,?  LaTourette said.  ?This bill will strip identity thieves of their arsenal of dirty tricks.?

The legislation creates powerful consumer protection tools, including:

  • Allowing consumers to place ?fraud alerts? in their credit reports to prevent identity thieves from opening accounts in their names, including special provisions to protect active duty military personnel;
  • Allowing consumers to block information from being given to a credit bureau and from being reported by a credit bureau if such information results from identity theft;
  • Providing identity theft victims with a summary of their rights;
  • Giving consumers the right to see their credit scores;
  • Giving all consumers the right to a free copy of their credit report;
  • Restricting access to consumers' sensitive health information;
  • Simplifying the way consumers can limit unsolicited marketing offers;
  • Ensuring improved accuracy of credit reporting procedures; and
  • Providing consumers with one-call-for-all protection by requiring credit bureaus to share consumer calls on identity theft, including requested fraud alert blocking.

It imposes meaningful new obligations on financial institutions to prevent identity theft and to ensure accuracy, including:

  • Requiring creditors to take certain precautions before extending credit to consumers who have placed ?fraud alerts? in their files;
  • Prohibiting merchants from printing more than the last 5 digits of a payment card on an electronic receipt;
  • Requiring banks to develop policies and procedures to identify potential instances of identity theft;
  • Requiring financial institutions to reconcile potentially fraudulent consumer address information;
  • Ensuring lenders notify consumers before submitting negative credit information; and
  • Requiring lenders to disclose their contact information on consumer reports.

The House adopted three amendments to the legislation, including:  

  • A manager's amendment offered by Chairman Oxley would clarify that the legislation does not preempt laws it does not address, gives furnishers of credit the same rights as credit bureaus to reject frivolous or irrelevant disputes brought by consumers, and gives federal regulators the ability to establish a system for credit bureaus to distribute credit reports in a timely manner without overwhelming the system during the implementation period of the new law.  The amendment was approved by voice vote.
  • An amendment offered by Rep. Bob Ney (OH) would establish national standards with regard to the free credit report provisions included in the act. The amendment was approved by vote of 233-189.
  • An amendment offered by Ranking Member Barney Frank (MA) would ensure that the free credit reporting requirements included in the legislation apply to consumer reporting agencies that maintain reports on both a nationwide and regional basis. The amendment was approved by vote of 235-186.  

Source: House Financial Services Committee

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