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The �鶹��ý Trade Commission today told the House Financial Services Committee Subcommittee on Financial Institutions and Consumer Credit that while data brokers may provide a valuable service both to business and government entities, “There are concerns about the aggregation of sensitive consumer information and whether this information is protected adequately from misuse and unauthorized disclosure. In particular, recent security breaches have raised questions about whether sensitive consumer information collected by data brokers may be falling into the wrong hands, leading to increased identity theft and other frauds.”

Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection said the FTC enforces three laws that restrict the disclosure of consumer information and require companies to ensure the security and integrity of the data in certain contexts: the Fair Credit Reporting Act restricts disclosure of consumer reports except for specified ‘permissible purposes’; the Gramm-Leach-Bliley Act imposes privacy and security obligations on financial institutions; and the FTC Act prohibits unfair or deceptive acts or practices in or affecting commerce. “Prohibited practices include deceptive claims that companies make about privacy, including claims about the security they provide for consumer information,” the testimony says.

Parnes said that the FTC has implemented a program to help combat identity theft. The agency collects complaints from consumers and provides victim assistance through a telephone hotline and a dedicated Web site; maintains a centralized database of victim complaints that acts as an tool for more than 1,100 law enforcement agencies; and provides education tools for consumers, law enforcers, and industry.

According to the testimony, the Commission receives between 15,000 and 20,000 contacts a week from victims of identity theft and consumers who want to learn how to avoid becoming a victim. “Victims are advised to: (1) obtain copies of their credit reports and have a fraud alert placed on them; (2) contact each of the creditors or service providers where the identity thief has established or accessed an account, to request that the account be closed and to dispute any associated charges; and (3) report the identity theft to the police, and if possible, obtain a police report.”

“A police report is helpful both in demonstrating to would-be creditors and debt collectors that the consumers are victims of identity theft, and also serves as an ‘identity theft report’ that can be used for exercising various rights under the newly enacted Fair and Accurate Credit Transactions Act. The FTC’s identity theft Web site, , has an online complaint form in which victims can enter their complaint into the clearinghouse,” Parnes said in the testimony.

The testimony states that the FTC has taken the lead in producing and promoting educational materials to increase consumer awareness and to provide tips for minimizing identity theft. The agency has developed two publications, “ID Theft: What’s It All About,” and “Take Charge: Fighting Back Against Identity Theft,” that consumers can access at
http://www.consumer.gov/idtheft/ . The FTC has distributed more than 1.4 million copies of the Take Charge booklet and has recorded more than 1.8 million visits to the Web version.

The FTC, in cooperation with the Department of Justice, the U.S. Postal Inspection Service, and the U.S. Secret Service, has instituted identity theft training seminars for state and local law enforcement officers. “More than 2,200 officers have attended these seminars, representing over 800 different agencies,” the testimony notes.

“The Commission is committed to ensuring the continued safety of consumers’ personal information,” Parnes said.

The Commission vote authorizing the testimony was 5-0.

Copies of the testimony are available from the FTC’s Web site at 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 fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. 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 . 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.

(FTC File No. 05-4805)