Some Efforts to Increase Awareness of Section 609(e) Were Under Way as of June 2005

At the time of our review, some efforts to educate consumers, business  entities, and local enforcement officials about their rights and obligations  under section 609(e)—notably efforts undertaken by the FTC, U.S. Other FTC outreach efforts on section 609(e) include links on FTC’s Web  site at www.consumer.gov/idtheft to its model summary of identity theft  victim rights and other information on identity theft, a toll-free hotline  (1-877-IDTHEFT) offering counseling to help consumers who want or need  more information about dealing with the consequences of identity theft,  and FTC’s Consumer Response Center and Distribution Office that  provides publications on identity theft, among other topics. According to FTC staff, section 609(e) will also be incorporated into the  public education campaign that FTC is required by the FACT Act to  implement by December 2005 which will help increase outreach on the  provisions. Many Believe the New Provision Will Be Useful, but Some Potential Concerns Were Identified

While not all identity theft victims will need section 609(e), FTC, law  enforcement agencies and consumer groups with whom we spoke believed  that the provision giving victims access to data on fraudulent business  transactions would help in resolving identity theft cases. State agencies and  consumer advocacy groups also identified some potential concerns with  the provision. FTC staff told us that as part of their overall FACT Act outreach efforts,  they intend to monitor the implementation of section 609(e) to determine  whether any additional efforts are necessary to ensure that the provision is  working as Congress intended. Federal Banking Regulators Had a Favorable View of FTC’s Process of Developing the Model Summary

On November 30, 2004, FTC published its final version of the model  summary of identity theft rights as mandated by the FACT Act (see app. FTC intends to assess the effectiveness of  its mandated identity theft campaign which will include coverage of section  609(e). It is too early to assess the actual impact of section 609(e)  on consumers’ ability to get business records relating to suspected  fraudulent transactions. These potential concerns  center primarily on the limited availability of a Spanish version of the  summary of rights and, to a lesser extent, on the clarity of the summary of  rights to the general population. While it is too early to determine the  extent of any implementation issues, FTC efforts to monitor the  implementation of section 609(e) should provide additional information on  the usefulness of the summary of rights in aiding identity theft victims. Objectives, Scope, and Methodology

Our reporting objectives were to (1) provide information on outreach  efforts to consumers, businesses, and local law enforcement agencies on  the provision in the Fair and Accurate Credit Transactions (FACT) Act of  2003 that allows identity theft victims to obtain business records relating to  fraudulent transactions; (2) describe the views and opinions of relevant  federal agencies, private business entities, and consumer groups regarding  the expected impact of the provision; and (3) discuss the process used by  the Federal Trade Commission (FTC) to develop the model summary of  rights of identity theft victims mandated in the FACT Act and examine the  opinions of related groups on this process. Postal Inspection  Service, and U.S. Secret Service—and the International Association of  Chiefs of Police, which includes the heads of police departments around  the country and abroad;  met with officials of the five federal banking regulators—Board of  Governors of the Federal Reserve System, Federal Deposit Insurance  Corporation, National Credit Union Administration, Office of the  Comptroller of the Currency, and Office of Thrift Supervision— regarding compliance by federally insured depository institutions with  the FACT Act provision and their interaction with consumers on identity  theft issues;  spoke with representatives of the three national credit reporting  agencies (CRAs)—Experian, Equifax, and Transunion—which play a  key role in distributing the summary of identity theft victim rights and in  helping identity theft victims correct their credit records;  held meetings with representatives of two states—California and  Washington—that had previously enacted identity theft laws with  provisions similar to the section 609(e) to obtain their views on the  expected effectiveness of the federal provision;  contacted five consumer advocacy groups—Consumers Union, Identity  Theft Resource Center, National Consumer Law Center, Privacy Rights  Clearinghouse, and U.S. Public Interest Research Group—that were  identified as being active in identity theft issues to obtain their views  and perspectives as representatives of consumers and identity theft  victims; and  obtained limited information from a few businesses and trade  associations on these subjects.
Why GAO Did This Study

The Fair and Accurate Credit Transactions (FACT) Act of 2003 which amended the Fair Credit Reporting Act (FCRA), contains provisions intended to help consumers remedy the effects of identity theft. For example, section 609(e) of the amended FCRA gives identity theft victims the right to obtain records of fraudulent business transactions, and section 609(d) requires the Federal Trade Commission (FTC) to develop a model summary of identity theft victims' rights. This report provides information on (1) outreach efforts to inform consumers, businesses, and law enforcement entities about section 609(e); (2) the views of relevant groups on the provision's expected impact; and (3) FTC's process for developing its model summary of rights and views on the summary's potential usefulness.

What GAO Found

Some efforts to educate consumers, business entities, and local law enforcement officials about their rights and obligations under section 609(e), which grants identity theft victims access to fraudulent business transaction records, were under way as of June 2005--notably by the FTC, U.S. Postal Inspection Service, International Association of Chiefs of Police, and National Credit Union Administration. For example, FTC had a number of outreach efforts on section 609(e) including coverage in conferences and presentations as well as information available through its Web site, toll-free hotline, and identity theft publications. While many of the other federal regulators and law enforcement agencies have undertaken outreach efforts on identity theft, most did not specifically include information on section 609(e). FTC staff indicated that the public education campaign on identity theft prevention mandated to be implemented by December 2005 by the FACT Act will also include coverage of section 609(e). According to FTC, law enforcement agency officials, and consumer advocacy group representatives we spoke with, section 609(e) should help victims to remedy the effects of identity theft more quickly. Other cited benefits include allowing victims to build stronger cases that could assist law enforcement agencies in developing intelligence data for their investigations. However, due to the limited experience with victims attempting to obtain business records, it is too early to assess the actual effectiveness of the section 609(e) provisions. Consumer groups and state agencies identified some potential problems with the timeliness of business transaction data and the extent of documents needed to verify a victim's identity theft claim. Given the newness of the provision, additional experience is needed to verify the validity of these potential concerns or other concerns not yet anticipated. FTC staff told us that as part of their overall FACT Act outreach efforts, they intend to monitor the implementation of section 609(e) to determine whether the provision is working as intended. Most of the agencies and groups we spoke with had favorable views of FTC's process to develop the model summary of identity theft victim rights mandated under section 609(d). FTC published its final form of the summary on November 30, 2004, and as required by FTC's guidance, the three national credit reporting agencies told us they began distributing a summary to consumers who contacted them with identity theft concerns before January 31, 2005. While most of the groups that we contacted felt that FTC had been responsive to their comments, consumer advocacy groups identified two potential concerns. These potential concerns center on the limited availability of a Spanish version of the summary of rights and the clarity of the model summary of rights to the general population. However, due to the limited time that the summary has been available, it is too early to determine the extent of any implementation issues.