Schumer Testifies Before Commerce Committee To Urge Passage Of Identity Theft Legislation

SCHUMER TESTIFIES BEFORE COMMERCE COMMITTEE TO URGE PASSAGE OF IDENTITY THEFT LEGISLATION

Lawmakers Intend to Add a Provision to Address Situations Where Companies Use Third Party Transportation or Storage of Sensitive Personal Information

Schumer: 'Consumers Have a Better Chance Tracking Down a Lost Book from Amazon than Banks Have Tracking Down Sensitive Data Lost in Transit'

Schumer-Nelson Comprehensive ID Theft Prevention Bill Would Address ID Theft before It Occurs, Not Just Punish Theft after the Fact

U.S. Senator Chuck Schumer (D-NY) testified before the Senate Commerce Committee Hearing on Identity Theft today. Schumer along with Commerce Committee member, Bill Nelson (D-FL) introduced the Comprehensive Identity Theft Prevention Act in April and also announce an addition to the bill which would require higher security standards for the shipping of data physically. In light of recent Bank of America and Citibank data tape losses, there is a significant loophole which allows companies to ship un-encrypted data without any special security measures. Below is Sen. Schumer's testimony:

Thank you, Mr. Chairman and Mr. Ranking Member for the opportunity to testify before the Commerce Committee today. I'm honored to be sitting next to Senator Feinstein, who has done so much good work on these issues for so many years.

Like Senator Feinstein, I come to urge action - quick action -- against an epidemic. An epidemic that burdens our economy, slows our Information Superhighway, and victimizes millions of Americans - Identity Theft.

As I've said before, what bank robbery was to the Depression Era, identity theft is to the Information Age.

But identity thieves are in some ways even worse than bank robbers. They not only steal people's money, they also rob people of their time, their sense of security, and their peace of mind.

And unless Congress, companies, and consumers take action, this is an epidemic that threatens to spiral out of control. Congressional action must be quick, and it must be comprehensive.

Identity theft is not a Democrat issue or a Republican issue - it is a non-partisan consumer and economic crisis. And there is no excuse for Congress failing to act in a bipartisan way.

The numbers are staggering:
Almost ten million people a year are victims of some sort of identity theft.
Every Senator on this Committee has thousands of constituents who have lost millions of dollars and wasted tens of thousands of hours because we have so far failed to take decisive action.

That's why Senator Bill Nelson, an esteemed member of this Committee, and I have introduced a bill that offers a truly comprehensive solution.

Instead of just adding another square to the current patchwork quilt of regulations, our bill provides a real security blanket for the American consumer.

To really tackle identity theft, our bill takes an aggressive approach in three key areas:

(1) Empowering Consumers;
(2) Protecting Our Most Personal Information; and
(3) Helping Victims restore their identities quickly and efficiently.

1. EMPOWERING CONSUMERS: First, we make companies tell consumers when their information has been breached, so consumers can take action to protect themselves.

We also empower consumers by requiring companies to tell them if that company plans to sell sensitive personal information they collect - so consumers can make intelligent decisions about whom to trust with their sensitive personal information.

2. PROTECTING INFORMATION: We also take action in the second key area: preventing misuse of sensitive personal information in the first place.

An ounce of prevention really is worth a pound of cure. And our bill makes prevention a centerpiece of the effort against identity theft.

We establish procedures for the FTC to require companies to authenticate those who try to buy sensitive personal information from them - to stop situations where companies like Choicepoint, for example, sell their personal information to identity theft rings posing as legitimate businesses.

We also insist that every company that stores sensitive personal information take "reasonable steps" to protect it -- a simple minimum requirement that they treat your sensitive personal information with the care it deserves.

The Federal Trade Commission has recently applauded this provision because of its potential to "reduce the risk of identity theft."

All companies who keep sensitive personal information need to take responsibility. They need to guard our identities as if they were gold - because in the hands of identity thieves, they are gold.

For that reason, we also intend to add a provision to address situations where companies use third party transportation or storage of sensitive personal information. Companies shouldn't be able to abdicate responsibility simply by hiring a subcontractor or courier.

We have a better chance of tracking down a lost book from Amazon.com than some banks have had in tracking down millions of sensitive records lost in transit.

3. HELP VICTIMS: Finally, our bill provides relief to the millions of Americans each year who fall victim to identity theft - vulnerable victims who don't know where to go or where to turn.

Our bill also creates an Office of Identity Theft within the FTC. This office will provide a one-stop shop to help consumers restore their identities.

Right now it takes the average consumer the equivalent of one month of full-time work, or 40 hours a week, just to restore their identity. Our bill fixes that.

Now, some of the provisions in our bill can be implemented by the FTC today, and I encourage them to begin this process and not simply wait for legislation.

Also I encourage every company in America, and especially in my state of New York, to do a top-to-bottom review of its procedures for handling consumers' sensitive personal information, to stave off more incidents where information is exposed to theft.

Identify theft is a serious issue that deserves real, comprehensive action, and I hope this committee will give the Schumer-Nelson bill the consideration it deserves. Thank you.

http://schumer.senate.gov/SchumerWebsite/pressroom/press_releases/2005/PR41722.IDtest.061605.html