Thank
you, Chair Prozanski and members of the committee, for the opportunity
to testify here today on the topic of protecting consumer credit
security and preventing identity theft. My name is Laura Etherton, and
I’m OSPIRG’s Consumer Advocate. OSPIRG, Oregon State Public Interest
Research Group, is a non-profit, non-partisan public interest
organization.
The
security of consumers’ personal information is critically important.
When that security is breached, it can cause damage. Identity theft is
currently the most significant example of what happens when a
consumer’s personal information falls into the wrong hands. OSPIRG
applauds the leadership that Chair Prozanski showed in the 2005 session
by sponsoring bills that would have provided Oregonians with strong
protections from identity theft.
What
is identity theft? It is when someone uses your personal information
without your permission to commit fraud or other crimes. If identity
thieves have your personal information, such as your social security
number, they can often get credit issued to them in your name. Almost
everyone has a story about how identity theft happened to them, or
someone they know, and how it took time – often years -- to clear up
the mess and restore their good name and credit history.
Currently,
gaps in the system allow thieves to get access to personal information
too easily, and make it too easy for thieves to use that information to
get credit issued in the victim’s name. These gaps are huge – and they
are fueling the current identity theft epidemic across the country. The
problem is particularly acute here in Oregon – in fact, the Federal
Trade Commission, the FTC, ranks Oregon as the 13th state in the nation
for identity theft.
To
protect consumers, Oregon must enact meaningful legislation. To
succeed, it will take a two-pronged strategy. First, stop the flow of
personal information to identity thieves. Second, block thieves who
have obtained personal information from being able to get credit in the
victim’s name.
A
major factor in the spread of identity theft crimes is the prevalence
of security breaches of thousands of individuals’ personal information.
Providence Home Services’ loss of over 350,000 patients’ private
information, including social security numbers, is a recent example of
this troubling trend. Unfortunately, we are seeing widespread security
breaches – where businesses and institutions have allowed personal
information to be accessed by unauthorized people, lost or misplaced
personal information, or even sold information to identity thieves.
For example, Bank of America lost data tapes with over 1.2 million
customers’ personal information. MasterCard breached the credit card
information of 40 million consumers. ChoicePoint, a data-broker, sold
145,000 individuals’ personal information to an international ring of
identity thieves.
These
flagrant breaches are unacceptable. Greater security must be afforded
to consumer’s private information. The first step is to require
companies to notify consumers and law enforcement of any breach
immediately. This notification allows law enforcement to take
appropriate action. It also alerts consumers to take appropriate
action, such as monitoring their credit reports. Twenty-three states
now require breach notification. In addition to this notification, we
encourage Oregon to adopt strong protections regarding adequate
document destruction on the part of businesses and institutions, as
well as protection of social security numbers.
Finally,
it’s important for Oregon to give consumers the right to block would-be
identity thieves from getting get credit in their name. The most
effective way to do this is by giving all Oregonians the right to
request a “security freeze” on their credit reports, and it’s a right
that consumers in twelve states already enjoy. With a security freeze,
a consumer can block access to his or her credit report, through the
use of a PIN. A security freeze does not hamper a consumer’s ability to
use existing credit, or seek new credit, because a consumer can
temporarily remove the freeze by using the PIN.
Support
is growing for these common sense solutions. Recently, we applauded
when Governor Kulongoski called for Oregon to adopt these measures and
others to help combat identity theft when he spoke at an event with
county sheriffs, chiefs of police, and prosecutors from across Oregon.
Thank
you for examining this important problem facing Oregonians. At OSPIRG,
we look forward to working with the Committee and the Legislature as a
whole to make sure Oregon provides consumers with robust measures to
protect credit security.
