Elder Law FAX -- June 19, 2006

FTC Offers Tips to Prevent Identity Theft and Protect Social Security Numbers
In the news recently have been several reports of how laptop computers containing private information, including Social Security numbers, have been stolen. To date, in most instances of theft authorities are not certain that the thieves actually targeted the laptops because of the information they contain, or because the thieves are just stealing laptops.

In a recent report to Congress, the Federal Trade Commission said that there are steps that government, industry, and consumers can take to help stem the tide of identity theft.

The FTC has established a Division of Privacy and Identity Protection, which is staffed with experts in privacy, data security, and identity theft. The Division focuses resources on cutting edge consumer privacy matters through aggressive law enforcement, as well as rulemaking, policy development, and outreach to consumers and businesses.

The FTC has pursued aggressive law enforcement against companies that failed to provide reasonable and appropriate security for sensitive customer data. It also has challenged organizations that have made deceptive claims about privacy procedures and security.

Since 2001, the Commission has brought twelve cases challenging businesses that have failed to take reasonable steps to protect sensitive consumer information in their files. The FTC recently reached a settlement with ChoicePoint, after the company allegedly allowed identity thieves to gain access to files of 160,000 consumers. The company paid $10 million in civil penalties and $5 million in consumer redress for identity theft victims, the report notes.

To combat identity theft, the FTC hosts a toll-free hotline at 1-877-IDTHEFT, and a secure online complaint form for consumers concerned about identity theft. "Every week, the Commission receives about 15,000 to 20,000 contacts from victims and consumers seeking information on how to avoid identity theft," the Congressional report says.
What about prohibiting businesses from using Social Security numbers altogether? According to the FTC report, credit reporting agencies use the numbers to ensure that credit data ends up in the right files and businesses use the reports to determine whether to extend credit, insurance, or employment to consumers.

"Without the ability to use SSNs as a personal identifier and fraud prevention tool, the granting of credit and the provision of other financial services would become riskier and more expensive and inconvenient for consumers," the report says.

"The challenge is to find the proper balance between the need to keep SSNs out of the hands of identity thieves, while giving businesses and government entities sufficient means to attribute information to the correct person," the report states.

The FTC has developed and disseminated identity theft-related consumer education materials, including an identity theft primer, "ID Theft: What It's All About," and a victim recovery guide, "Take Charge: Fighting Back Against Identity Theft."

The report notes that there are other things that government, industry, and consumers can do to reduce identity theft. "First," the report states, "both government and industry need to consider what information they collect and maintain from or about consumers and whether they need to do so. Entities that possess sensitive consumer information should continue to enhance their procedures to protect it. The Commission will continue its law enforcement and outreach efforts to encourage and, when necessary, require better protections."

"Second, industry should continue the development of improved fraud prevention methods to stop identity thieves from misusing the consumer information they have managed to obtain. In this regard, the FACT Act should prove instrumental by requiring the bank regulatory agencies, the NCUA, and the FTC to develop jointly regulations and guidelines for financial institutions and creditors to identify possible risks of identity theft."

"Third, the Commission will continue and strengthen its efforts to empower consumers by providing them with the knowledge and tools to protect themselves from identity fraud and to deal with the consequences when it does occur."

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/ftc/complaint.htm.

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