Ky. AG Drafts Legislation to Thwart Identity Theft

Kentucky Attorney General Greg Stumbo announced recently that he has drafted legislation to protect consumers against identity theft and created a task force to review the proposed legislation, which will be presented to the general assembly in the 2006 session.

“This task force, which met for the first time today, is charged with reviewing this draft legislation, helping fine-tune it and propel it into an ID Theft Protection Act that legislators will rally behind,” Stumbo said last week.

“Identity Theft is the fastest growing crime in the country, with more than 1,600 Kentuckians victimized last year alone. There’s credit card fraud, bank fraud, loan fraud, benefits fraud, phone and utilities fraud…the list goes on. The time for Kentucky to do something about it is now,” Stumbo added.

Using components of legislation passed in Texas, California, Louisiana and North Carolina as a guide, the Attorney General’s draft legislation does several things:

* It protects social security numbers by restricting a business’ ability to make that information public. Social security numbers are the key to everyone’s financial accounts.

* It allows consumers to place security freezes on their credit reports. This means that a credit bureau is prohibited from releasing the credit report to a potential creditor without a consumer’s express authorization.

* This legislation prohibits credit reporting agencies from providing consumers’ credit information to businesses, except as permitted under the Fair Credit Reporting Act.

This will close the loophole in the federal law, which protects information in consumers’ credit reports from wholesale release, but allows credit header information to be sold to businesses like direct marketers and private investigators.

* It requires businesses to take precautions when disposing of private information.

* It addresses the problems faced when companies like ChoicePoint have a security breach and information is stolen. Businesses will be required to immediately notify consumers of a breach so they can take immediate action to protect themselves.

* The law also addresses the problem some consumers have of getting a police report when victimized by identity theft. Local police are sometimes reluctant to take a report, especially when the perpetrator is in another state or a foreign country. They know it will be a difficult case to close.

The new law will direct the Justice Cabinet to develop a form for reporting ID theft crimes. Local and state law enforcement will use the forms but not be required to count them as open cases.

* The legislation also addresses the problem of mistaken identity… when a crime is committed in the victim’s name.

* It adds ID theft to the list of subjects for which the Kentucky Law Enforcement Council develops mandatory training.

* It provides that consumers who are harmed by violations of this law can file a private lawsuit against the individual or company that violated the act and recover damages and attorneys fees.

*Finally, the draft legislation requires state government agencies to reduce the collection, use and dissemination of personal information and to discontinue collecting the information when it’s not necessary.

“I have complete confidence in this legislation and in this task force that has been assembled,” Stumbo added. “We need strong laws to allow consumers to protect themselves and require businesses possessing consumers’ information to act responsibly. This legislation does that. It addresses some of the root causes of ID theft and provides victims the tools they need to restore their good name.”