For Release: April 21, 2004

FTC Seeks Comments on Proposed Identity Theft, Active Duty Alert Regulations

The Federal Trade Commission is seeking public comment on proposed rules under the Fair and Accurate Credit Transactions Act (FACTA) regarding further definition of the terms “identity theft” and “identity theft report,” the duration of active duty alerts, and the appropriate proof of identity needed by consumers to block fraudulent trade lines in their consumer reports, place or remove fraud or active duty alerts, or obtain a file disclosure containing a truncated Social Security number under certain circumstances. FACTA, which was enacted on December 4, 2003, and amends the Fair Credit Reporting Act (FCRA), gives identity theft victims new rights to place “fraud alerts” on their credit reports and work with creditors and credit bureaus to “block” negative information appearing in their credit files as a result of identity theft.

FACTA also allows military personnel to place an alert on their credit report if they are deployed, and allows consumers to request that a credit bureau truncate their Social Security number when disclosing their credit report to the consumer. The Act directs the FTC to make the above-mentioned rules relating to these new rights. Comments on the proposed rules must be received on or before June 15, 2004. At the close of the comment period, the Commission will review the comments, modify the proposed rules as appropriate, and issue the rules as final.

The Commission proposes that “identity theft” be defined as a fraud which is committed or attempted, using a person’s identifying information without lawful authority and that “identifying information” have the same meaning as the criminal statute’s “means of identification.” Consumers need to use “identity theft reports” to obtain an extended fraud alert on their credit file and to block negative information resulting from identity theft from appearing in their credit files. To prevent misuse of identity theft reports for credit repair scams, the FTC proposes to add two elements to the definition of “identity theft report.” First, the proposal would require that consumers allege the identity theft as specifically as possible, and second, would allow credit bureaus or creditors to request, within reasonable bounds, additional information or documentation to help them determine if identity theft actually occurred.

FACTA directs the FTC to determine the duration of active duty alerts for military personnel, setting a minimum of 12 months. The FTC proposes that 12 months is an adequate duration that will cover the time period for which the majority of service members will be deployed. The Federal Register Notice states that military personnel who receive extended deployments may place another active duty alert in their file after the first alert expires if they feel they need additional protection.

Finally, the Federal Register Notice addresses what constitutes “appropriate proof of identity” to block a fraudulent trade line, place or remove a fraud alert, or obtain a file disclosure containing a truncated Social Security number. The proposed rule would require credit bureaus to develop “reasonable requirements” to ensure that consumers are matched with their files and to adjust what information is requested to prevent identifiable risks of harm. The FTC suggests, using two examples, that the “requirements” for a file match may entail full name, full address, full Social Security number, and/or date of birth, and for additional proof of identity, copies of government-issued identification documents, utility bills, and other current authentication methods such as answering questions only the consumer would know.

Comments can be filed electronically at http://www.regulations.gov. Commenters should select “Federal Trade Commission” at “Search for Open Regulations,” locate the summary of this Notice, click on “Submit a Comment on this Regulation,” and complete the form. Written comments should refer to “FACTA Identity Theft Rule, Matter No. R411011 ” on both the envelope and the text, and should be mailed to the following address: Post Office Box 1030, Merrifield, VA 22116-1030. Please note that courier and overnight deliveries cannot be accepted at this address. Courier and overnight deliveries should be delivered to the following address: Federal Trade Commission/Office of the Secretary, Room H-159 (Annex J), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Comments containing confidential material must be filed in paper form. Written comments must be received on or before June 15, 2004. Comments on any proposed filing, recordkeeping, or disclosure requirements that are subject to paperwork burden review under the Paperwork Reduction Act should additionally be submitted to: Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for the Federal Trade Commission. Comments should be submitted via facsimile to (202) 395-6974 because U.S. postal mail at the Office of Management and Budget is subject to lengthy delays due to heightened security precautions.

The Commission vote approving publication of the Federal Register Notice was 5-0.

Copies of the Federal Register Notice are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent identity theft and fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid these problems. To file a fraud complaint, 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. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

http://www.ftc.gov/opa/2004/03/factafrn0421.htm