by Margaret Talev
March 11, 2005
Senate Banking Committee Chairman Richard Shelby, R-Ala., launched hearings Thursday on a problem now estimated to touch 10 million U.S. consumers a year by saying he will focus on "the state of industry compliance" with existing laws and what additional regulations are needed.
"Identity theft criminals have grown more sophisticated and are more aggressively pursuing information from centralized data sources," Shelby said.
Federal Trade Commission Chairwoman Deborah Platt Majoras told the panel that the burgeoning data-collection industry is so amorphous that the government doesn't really know how many such companies exist, and that they are now covered by a loose "patchwork" of state and federal laws.
"Recent events clearly raise the issue of whether these laws are sufficient," she said. "What we really ought to be looking at is how they secure the data."
Lawmakers have proposed at least 10 anti-identity theft measures already this year, many of which seek to hold so-called information brokers to higher security standards. More such measures are expected to be introduced this month.
The hearings follow several high-profile thefts of consumer names, Social Security and credit card numbers and other data.
This week, a Lexis Nexis subsidiary that compiles criminal information for the federal government said imposters obtained data on 32,000 customers, and the company that runs DSW Shoe Warehouse acknowledged the widespread theft of its customers' credit card data over at least the past three months.
Last month, con artists tapped into data on at least 145,000 Americans gathered by Choice Point, one of the world's largest information brokers. These thefts come on the heels of Bank of America's disclosure that it lost backup data tapes last December for 1.2 million accounts held by federal employees, prompting more concerns about identity theft.
Choice Point and Bank of America executives were to testify Thursday, but Shelby asked them to return next week and adjourned the hearing early so senators could attend hours' worth of scheduled votes on other matters.
Before they adjourned, several senators made clear they are fed up with what they see as a cavalier attitude by companies that collect data.
Sen. Patrick Leahy, D-Vt., the ranking member of the Senate Judiciary Committee, which also is expected to take up the issue, told the banking panel that Choice Point had committed an "irresponsible violation" of its fiduciary responsibilities. Of the recent Bank of America case, he said, "I don't know what these people are thinking!" Leahy also said Congress should think about limiting access to government contracts to companies that fail to provide sufficient privacy or security measures.
Sen. Charles Schumer, D-N.Y., said companies "seem to feel that your personal information is their domain to do with whatever they choose" and that lawmakers "have to stop malicious companies conning consumers out of their information with private policies that are impossible to understand."
"What bank robbery was to the Depression Era," Schumer said, "identity theft is to the Information Age."
Beth Givens, director of the San-Diego based Privacy Rights Clearinghouse, said the attention to the issue on Capitol Hill even as lawmakers grapple with war in the Iraq and the future of Social Security shows lawmakers recognize how serious a problem identity theft has become.
"Most people know somebody who's been a victim of identity theft, they hear these heart-rending stories of people whose lives have been ruined, who spend months or years trying to clear their names," Givens said. "All the while they're unable to get credit, rent an apartment, get a job, refinance their home, buy a home and get a car loan. Their insurance may be dropped or they may be given a higher premium or they may not get insurance at all. It takes so long to clear your name _ and even when it's cleared, you're not sure you're cleared. You have no idea when that identity thief might start back in."