The House voted Wednesday to give Americans new weapons for fighting identity theft — including a free credit report on request and a single telephone call “fraud alert” system to block thieves from opening accounts in their names
Those steps were among the changes lawmakers approved to the Fair Credit Reporting Act, which contains provisions that must be renewed by year’s end. The legislation was approved 392-30.
Identity theft cost consumers and businesses $53 billion last year, the Federal Trade Commission said last week, with almost 10 million Americans falling victim to thieves using their name and other personal information, such as a Social Security number or bank and credit card numbers, to establish credit or buy products.
“This bill will give consumers the weapons they need to fight identity thieves and the tools to repair their credit history after an attack,” said House Financial Services Chairman Michael Oxley, R-Ohio.
Under the legislation, all consumers would have the right to a free copy of their credit report annually upon request. Only six states — Colorado, Georgia, Maryland, Massachusetts, New Jersey and Vermont — now require the nation’s three major credit bureaus — Equifax Inc., Experian Information Solutions Inc. and Trans Union — to give consumers free credit reports every year.
At the request of Rep. Barney Frank, D-Mass., the House agreed to include regional and national specialized credit bureaus to the list of credit bureaus that would have to provide free credit reports.
The bill also gives consumers “one-call-for-all” protection by requiring credit bureaus to share consumer calls on identity theft, including requested fraud alert blocking.
“This legislation not only empowers consumers with protections, it also demands creditors and credit bureaus do their part to combat fraud,” said Rep. Darlene Hooley, D-Ore.
The House voted down an amendment that would have put a nine-year cap on the legislation instead of making it permanent.
The White House also supports the legislation. “The bill removes the sunsets from the Fair Credit Reporting Act and includes many of the administration’s proposed consumer protections, including new tools to help fight identity theft,” White House officials said in a statement.
The Senate has yet to consider similar legislation, but its Banking Committee is expected to act soon.
Congress must address the Fair Credit Reporting Act this year because the 1996 provisions that instituted uniform reporting requirements are due to expire at the end of 2003.
“The national uniform credit reporting system has lowered costs and increased choice and convenience for American consumers,” said Rep. Spencer Bachus, R-Ala. “Much like the national interstate highway system allows for quick and easy travel across state lines, a national uniform credit reporting system allows for consumers to receive credit in a cost-effective and timely fashion.”
However, several consumer groups have come out against the legislation, which would pre-empt tougher state legislation on the sharing of personal data. For example, California just passed a law allowing California consumers to block banks, insurance companies and other institutions from sharing their personal information.
“We believe that all Americans deserve the same protections,” said a coalition of consumer and privacy groups including Consumers Union, U.S. Public Interest Research Group, Consumer Action and the NAACP in a letter sent Tuesday to Congress. “At the very least, stronger state financial privacy giving citizens the right to choose whether their banks share or sell confidential financial information should not be pre-empted.”
The House by voice vote rejected an amendment by Rep. Maxine Waters, D-Calif., to exempt California’s new law from the legislation.