WASHINGTON – The Bush administration urged Congress Wednesday to strengthen the nation's credit laws to make it harder for crooks to steal other people's identities.
Bemoaning a crime that it said could claim a million new victims this year, Treasury Secretary John Snow (search) said lawmakers need to implement a national security alert system. Such a system would allow victims of identity theft with a single phone call to alert all financial institutions to the fact that a person's credit information has been stolen.
Snow, appearing before the House Financial Services Committee, also proposed a series of other changes, including increased surveillance by banking regulators, to ensure that financial institutions are doing all they can to guard against identify theft (search). The changes would be part of a congressional reauthorization that must be done by the end of this year in the uniform reporting standards in the Fair Credit Reporting Act (search).
Snow said a uniform national alert system would allow quick sharing of credit information among bureaus, banks and law enforcement and limit the damage done to a consumer whose identity has been stolen.
"Perhaps the most serious threat to financial consumers today is identify theft," Snow told the committee. "Many identity thieves target the most vulnerable members of our society -- families of the recently deceased, seniors, hospital patients and men and women serving our nation overseas."
Snow said a recent study estimated that 12 million Americans have already been victims of identity theft and various estimates say that another 1 million persons could fall victim this year.
He said that once victimized, persons who have had their identity stolen can spend a lengthy period getting their good credit rating restored. Snow cited a recent General Accounting Office (search) study that victims spent on average 175 hours trying to recover from the crime.
Snow told the panel that in addition to the national alert system and expanded scrutiny by government regulators, the Fair Credit Reporting Act should be amended to allow all consumers to obtain for free an annual credit report. Currently, the law only requires the free credit report be given to someone who has been denied credit or is the victim of fraud.
Snow said the current law should also be amended to make it easier for consumers to say no to unsolicited credit offers. He said that too often consumers' options are hidden from view by financial institutions seeking to sign up new credit card holders.
Rep. Spencer Bachus, R-Ala., is sponsoring legislation that would renew the uniform standards of the Fair Credit Reporting Act, and Snow told the panel the administration supports many of the details contained in that legislation.
Industry groups have raised concerns about some of Snow's proposals, such as the requirement that a free credit report be given to all consumers who request it.