Federal Trade Commission FCRA and Identity Theft Overview

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Federal Trade CommissionFCRA and Identity Theft
Overview

• Andrew M. Smith
• Assistant to the Director
• Bureau of Consumer Protection
• Federal Trade Commission

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Terry and my boss (at a Senate FCRA Hearing).
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Federal Trade Commission

• Principal Consumer Protection Agency
• Independent Commission
• Law Enforcement Agency
• FTC Act Unfairness Deception
• Financial Privacy Laws GLB, FCRA
• Consumer Credit Laws Non-banks

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Lending Enforcement

• Associates/Citigroup 240 million
• Fairbanks 40 million
• Stewart Finance
• Mark Diamond 270,000
• first broker case
• Consumer Education

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Other Developments

• National Credit Repair 1.2 million
• AmeriDebt
• Ballenger Group 750,000
• ID Theft Survey
• Do-Not-Call

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Identity Theft

• Survey Results Released in September
• 3.23 million victims or 1.5 percent of the
  adult population of identity theft with new
  accounts opened or other frauds committed in
  their name
• 6.7 million victims or 3.19 of the adult
  population of account theft where thieves
  placed charges on existing accounts, usually
  credit cards
• estimated 48 billion in losses to businesses,
  nearly 5 billion in losses to victims, and
  almost 300 million hours spent trying to resolve
  the problem

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The National Do Not Call Registry

• Telemarketing Sales Rule Amendments Adopted
  December 2002 include Do Not Call
• Giving Consumers a Choice
• 53.7 million telephone numbers registered since
  June 27
• Consumers with registered numbers have filed over
  37,000 complaints since October 11

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Terrys Excellent Adventure(or I Know What You
Did Last Summer)
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FCRA Legislation

• Prevent and Detect ID Theft
• Assist ID Theft Victims
• Enhance Credit Report Accuracy
• Protect Consumers Privacy
• Make the Credit Process More Fair
• FCRA Clean-Up

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ID Theft Prevention

• credit card truncation
• CRAs must report address discrepancy to users
• rulemaking re address discrepancy for users
• truncation of SSN in consumer file disclosure
• dormant accounts must be closed notice of
  activity in inactive accounts must be given

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ID Theft Prevention

• fraud alerts
• require card issuer to investigate COA
• ID Theft red flags
• require proper disposal of consumer report
  information
• enhanced criminal penalties for IDT
• notification of FTC upon security breach

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Victim Assistance

• businesses must share credit, account, and
  application info w/ IDT victims
• prohibit sale/transfer of IDT debt
• debt collectors must share info w/ IDT victims
• debt collectors must report IDT to creditor

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Victim Assistance

• trade-line blocking
• prohibit repollution of credit reports by
  refurnishing of IDT trade lines
• CRAs must coordinate and report on IDT
  complaints, fraud alerts, and blocks
• CRAs must send IDT summary of rights

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Enhancing Credit Report Accuracy

• risk-based pricing notice
• free reports 603/p, 603/z, central source
• bar furnishing if furnisher has reasonable cause
  to believe info is inaccurate
• require furnishers to have reasonable procedures
  to ensure accuracy
• allow consumers to dispute directly w/ furnisher

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Enhancing Credit Report Accuracy

• Reseller reinvestigation referral to repository
• CRAs must report to furnishers results of
  reinvestigations
• FTC Study of credit report accuracy the
  dispute process
• FTC-CRA complaint sharing

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Enhancing Credit Report Accuracy

• furnishers must modify records upon completion of
  reinvestigation
• clarify that CRA reinvestigations must be
  reasonable
• provide furnisher contact info on credit report

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Protecting Consumers Privacy

• improve prescreen opt-out
• affiliate marketing disclosure opt out
• prohibit name of medical creditor in consumer
  rept used for credit, insurance, employment
• furnishers must identify to CRAs if they are
  furnishing medical info
• CRAs must mask medical providers names
• Studies
• FRB, of prescreening
• FTC, of affiliate sharing by users

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Making the Credit Process More Fair

• furnisher must notify consumer before furnishing
  derogatory data
• score disclosure
• FTC Study of credit insurance scores
• Financial Literacy Education Commission

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Making the Credit Process More Fair

• FTC Study
• use of partial matching information and
  multiple data points
• whether consumers should get same credit report
  as creditor following adverse action
• common transactions not included in credit
  reports
• disclosure of credit card issuers ability to
  increase APR

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FCRA Clean-Up

• Uniform National Standards
• fix provisions re employment investigations
  (Vail letter)
• statute of limitations (discovery rule not 5
  yrs)
• debt collector delinquency date

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Coming Attractions

• Revised FCRA Commentary
• FCRA Rulemaking
• FCRA Studies
• FCRA Enforcement
• Focus on user and furnisher duties
• Lending Enforcement

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Federal Trade Commission

• For the Consumer
• 1-877-FTC-HELP
• www.ftc.gov

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One More Time