FTC Testifies on Protecting Consumers Data

The Federal Trade Commission testified today before the U.S. House Energy and Commerce Committee’s Subcommittee on Commerce, Trade, and Consumer Protection that “recent security breaches have raised questions about whether sensitive consumer information collected by data brokers may be falling into the wrong hands leading to increased identity theft and other frauds.” The Committee is examining recent developments involving the security of sensitive consumer information.

FTC Chairman Deborah Platt Majoras said that increased scrutiny about the security of consumer data takes place against the background of the threat of identity theft, a crime that harms both consumers and financial institutions. “A 2003 FTC survey showed that over a one-year period, nearly 10 million people – or 4.6 percent of the adult population – had discovered that they were victims of some form of identity theft.”

According to the testimony, there are three laws enforced by the FTC that restrict disclosure of consumer information and require companies to ensure the security and integrity of the data in certain contexts, the testimony says.

Majoras told the Subcommittee that the FTC has implemented a program to help combat identity theft. The agency collects complaints from consumers and provides victim assistance through a telephone hotline and a dedicated Web site; maintains a centralized database of victim complaints that acts as an tool for more than 1,100 law enforcement agencies; and provides education tools for consumers, law enforcers, and industry.

According to the testimony, the Commission receives between 15,000 and 20,000 contacts a week from victims of identity theft and consumers who want to learn how to avoid becoming a victim. “Victims are advised to: (1) obtain copies of their credit reports and have a fraud alert placed on them; (2) contact each of the creditors or service providers where the identity thief has established or accessed an account, to request that the account be closed and to
dispute any associated charges; and (3) report the identity theft to the police, and if possible, obtain a police report.”

“A police report is helpful both in demonstrating to would-be creditors and debt collectors that the consumers are victims of identity theft, and also serves as an ‘identity theft report’ that can be used for exercising various rights under the newly enacted Fair and Accurate Credit Transactions Act. The FTC’s identity theft Web site, www.consumer.gov/idtheft, has an online complaint form in which victims can enter their complaint into the clearinghouse,” Majoras said in the testimony.

The testimony states that the FTC has taken the lead in producing and promoting educational materials to increase consumer awareness and to provide tips for minimizing identity theft. The agency has developed two publications, “ID Theft: What’s It All About,” and “Take Charge: Fighting Back Against Identity Theft,” that consumers can access at
http://www.consumer.gov/idtheft/

The FTC, in cooperation with the Department of Justice, the U.S. Postal Inspection Service, and the U.S. Secret Service, has instituted identity theft training seminars for state and local law enforcement officers. “More than 2,200 officers have attended these seminars, representing over 800 different agencies,” the testimony notes.

“The Commission is committed to ensuring the continued safety of consumers’ personal information,” Majoras said.

The Commission vote to authorize the testimony was 5-0.

Copies of the testimony are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. 052 3069)