Antitrust Law Daily Wrap Up, PRIVACY NEWS: McSweeny urges Congress to address identity theft, (Mar 20, 2015)

By Edward L. Puzzo, J.D.

Public concern over identity theft is stronger than concern over violent crime, natural disasters, or terrorism and is felt across ages, races, education levels, and geographic areas, FTC Commissioner Terrell McSweeny reported on March 18. Speaking before the Identity Theft Resource Center in Washington, DC, McSweeny urged Congress to pass national breach and data security legislation to help address this issue.

The Bureau of Justice Statistics found that in 2012 the financial loss from identity theft totaled nearly $25 billion, nearly double the total loss from all property crime, the Commissioner said. Estimates are that 110 million Americans had their data exposed within the last year, and there is a robust and lucrative market for stolen consumer data. In some cases, data could have been exposed years ago and remained undetected until the victim applies for a loan, files taxes, or makes a large purchase like a home or a car.

Currently, government document or benefits fraud accounts for 40 percent of the nearly 1,000 identity theft consumer complaints the FTC receives each day, McSweeny stated. Specifically, tax identity theft and IRS imposter scams are on the rise, recently causing one of the largest e-filers to shut down its system due to the amount of suspicious tax filings.

Medical records are considered the most valuable consumer information on the black market, she reported. Scammers can use the medical records of children to steal identities and commit frauds that have a good chance of remaining undetected until a child turns 18.

McSweeny advocated for strong laws and standards so that breaches can be prevented. She noted that the FTC has asked Congress to pass national breach and data security legislation for some time and expressed satisfaction that there now appears to be bipartisan support in Congress for such legislation.

She noted that Congressmen Burgess and Welch recently introduced such legislation. While praising some aspects of the bill, the Commissioner felt other aspects could use improvement. Two such aspects are the absence of rule-making authority for the FTC and the lack of geolocation and health care data from the definition of personal identifying information. However, McSweeny believes that the draft legislation provides a useful framework that Congress can use to build greater consumer protections, while providing business and innovators with national rules for protecting consumer data and notifying them in cases of breach.

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