Good morning Chairman Greenwood and distinguished members
of the House Subcommittee on Oversight and Investigations.
On behalf of the Pennsylvania Attorney General Mike Fisher,
I am honored to be here this morning to testify on the important
topic of identity theft. My name is John Abel and I am a Senior
Deputy Attorney General in the Philadelphia Regional Office
of General Fisher's
Bureau of Consumer Protection.
Identity theft is a serious crime and growing problem across
the country with Pennsylvania's experience being no exception.
Victims of this crime face devastating economic repercussions
and oftentimes spend countless hours undoing the harm in order
to get their finances back in order. This can be a very stressful
experience for the ordinary consumer who in many instances
does not realize until much later that their identity has been
hijacked by an unknown perpetrator. By this time, hundreds,
if not thousands, of dollars in unauthorized charges have been
made in their name from any number of sources.
I am here today to speak on behalf of the Bureau of Consumer
Protection of the Attorney General's Office that is housed
within the Public Protection Division. Along with the Bureau
of Consumer Protection, a number of other offices are located
within Public Protection including the Health Care Section,
Anti Trust Section, Charitable Trusts and Organization Section
and the Civil
Rights Enforcement Section.
Before I begin to talk about this problem, let me start by
giving you a brief background of the Bureau of Consumer Protection.
By law, the Attorney General's Bureau of Consumer Protection
is authorized to perform the following duties:
* Investigate commercial and trade practices in the distribution,
financing and furnishing of goods and services for the use
* Conduct studies, investigations and research into matters
affecting consumer interests and make such information available
to the public;
* Advise the Pennsylvania Legislature on matters affecting
consumer interests, including the development of policies and
the proposal of programs to
* Investigate fraud and deception in the sale, servicing and
furnishing of goods and products, and strive to eliminate such
* Promote consumer education and publicize matters relating
fraud, deception and misrepresentation.
The Bureau of Consumer Protection has seven regional offices
which handle more than 40,000 written complaints annually from
consumers throughout the Commonwealth. Over the past couple
of years, the number of complaints has risen dramatically by
more than 30 percent. This increase is due to a number of factors,
one of which includes a growing wave of bankruptcies of a number
of large retail establishments. Each of these consumer complaints
is assigned to an individual agent and in most instances, that
agent will seek to mediate the case with the business with
hopes of achieving a satisfactory resolution. Should the Bureau
detect a patten or practice of consumer fraud, based on complaint
history or other sources, the Bureau may then commence a formal
Under the law, the Bureau is authorized to file a formal legal
action where it has reason to believe that a business has engaged
in such a pattern of illegal practices and it is in the public
interest to do so. On average, the Bureau files 150 actions
per year. Legal actions take the form of a lawsuit filed in
the Commonwealth Court or local Court of Common Pleas. These
actions also include a settlement agreement permitted by law
which is known as an Assurance of Voluntary Compliance. Through
these actions, the Bureau can seek injunctive relief, such
as prohibiting a company from doing business in the Commonwealth,
as well as consumer restitution. The Bureau is authorized to
seek a penalty of $1,000 per violation and $3,000 per violation
where the consumer is
of age 60 or older.
With regard to the issues of identity theft, I will focus
on the efforts of the Bureau of Consumer Protection in educating
consumers to avoid these thieves and in assisting consumers
with restoring their credit. Although our Office is vested
with criminal authority to pursue perpetrators of identity
theft, as a civil law litigator with the office, I will not
be able to speak specifically to the details of any criminal
investigations or prosecutions. However, I would be happy to
provide later any further information that the subcommittee
III. Scope of Problem
According to the Social Security Administration, more than
750,000 incidents of identity theft occurred nationwide last
year. One study found that on the average, it takes victims
175 hours and over $800 in out of pocket to clear their name.
The Federal Trade Commission reports that in 2002 they received
161,819 identity theft complaints. This national figure is
almost double that which was reported in 2001, when the FTC
tracked 86,198 complaints of identity theft. We have every
reason to believe that the trend is increasing this year.
Allow me to share with the Committee some recent numbers which
pertain specifically to Pennsylvanians. Statistics on identity
theft are maintained by the Federal Trade Commission which
established an Identify Theft Hotline and Data Clearinghouse
in 1999. These records show that in 2002, Pennsylvania had
reports of victims in 5,080 cases. The overwhelming majority,
46 percent, specifically experienced credit card fraud. Next
to credit card fraud, the most common instance involved unauthorized
use of phone or utility services. Almost 1 in 4 of these crimes
occurred in Philadelphia. However, every region in the Commonwealth
has experienced this brand of crime.
With statistics such as these, which have been steadily increasing,
identity theft is a problem that certainly warrants the continued
attention of the
Data shows that the typical victim of identity theft is between
30 and 40 years old and does not notice the crime until roughly
a year after they have become a victim. At this age, people
generally have an established credit history and a steady income.
Similarly, with children, work, and other commitments, there
are a lot of priorities and responsibilities to tackle. It
is often easy to take your financial privacy and security for
granted. Particularly disturbing is the increasing victimization
of our seniors who, with their good credit, retirement nest
eggs and trusting nature, are often targeted by scam artists.
Only the state of Florida has a higher percentage of citizens
over the age of 65 than Pennsylvania, and Attorney General
Fisher's efforts to protect the Commonwealth's citizens includes
a special commitment to protection of our
These criminals use a variety of methods to access your information.
They steal purses and wallets for personal information; they
complete change of address cards to have personal information
forwarded out of the victim's hands.
Other practices include "dumpster diving," where criminals steal discarded
statements and pre approved credit offers from the victim's trash. "Shoulder
surfing" refers to the practice of stealing PIN numbers and account numbers
over the person's shoulder while they are using an ATM. Of course, the Internet
is fertile ground for these thieves. A fraudulent e mail can be sent promising
some benefit in exchange for personal information. A surprising number of people
quickly sent out the information without taking any steps to determine the validity
of the offer.
IV. Efforts to Combat Problem
The old saying that "an ounce of prevention is worth
a pound of
cure" is particularly true in the case of identity theft. Attorney General
Fisher has taken action to educate Pennsylvanians on how to avoid these tactics.
Through various forms of outreach and public speaking, representatives from the
Bureau of Consumer Protection help to spread the word on the rather simple and
easy steps that consumers can take to avoid becoming a victim. We appear before
church and other community organizations, senior groups, as well as numerous
civic associations. We staff information booths at shopping malls and county
fairs throughout the state.
Just this last year, the Bureau joined in National Consumer
Protection Week by participating in consumer education fairs
and activities throughout the
Commonwealth. The theme was "Consumer Confidential: The Privacy
Story." As part of this event, the Bureau rolled out a new brochure titled "Consumer
Privacy: Protecting Your Personal Information."
Consistent with what I had mentioned about the seriousness
of these crimes against seniors, the Attorney General's Office
has also launched a program known as the Senior Crime Prevention
University to educate older Pennsylvanians and their families
on crime prevention. The Senior Crime Prevention University
is presented in conjunction with other law enforcement agencies
who provide training to help stop the multitude of crimes,
including identity theft, against
the senior citizens of Pennsylvania.
The Bureau has also specially published a brochure which offers
specific tips to protect personal identifying information.
* Minimize the identification information and cards you carry.
Don't carry your social security card with you and carry other
cards that list your social security number (such as prescription
cards or insurance cards) only when
* Purchase a shredder. As I said earlier, identity thieves
commonly sift through garbage seeking discarded mail such as
pre approved credit card
offerings and bank statements.
* Be mindful of billing cycles if it seems like one of your
bills didn't arrive, follow up with the business. Remember,
that in addition to containing your name, address and other
information, monthly statements also contain
* Don't give out personal information over the phone, through
the mail, or over the Internet unless you have initiated the
contact, or know with whom you are dealing. To get your information,
identity thieves may pose as representatives of banks, Internet
services providers, even government agencies.
* Order a copy of your credit report.
If, despite taking these precautions, a person's information
does end up in the wrong hands, our Office recommends taking
the fallowing steps immediately:
* Call the fraud departments of the credit bureaus and request
that a "fraud alert" be put on your file. This lets
creditors know to call you before they open any new accounts
in your name. You should also ask for a copy of your credit
report and follow up with these credit bureaus by asking that
they remove any fraudulent or incorrect information.
* Contact banks, credit card companies and all other creditors
who issued credit in your name and/or permitted access to your
existing account and close
all affected accounts.
* Finally, contact your local police department and file a
criminal report on the incident. Such a report can help in
clearing up your credit records and, or course, may lead to
the arrest of the thief.
As I mentioned before, each consumer complaint that the Bureau
receives is assigned to an individual agent. In cases of identity
theft, this agent is available to direct the consumer to the
appropriate agencies. Additionally, the agents are available
to work with, and provide information to, other parties in
an effort to address some of the problems created by the theft.
The Bureau has also taken action within the context of legal
actions to protect consumer privacy and avoid identity theft.
For instance, when an online retailer of children's education
materials announced that it would cease operations and sell
off its assets, Pennsylvania, along with a majority of other
states, filed an Objection in the Bankruptcy Court to prevent
that company from selling its customer list as an asset. Ultimately,
through the efforts of Pennsylvania, the FTC and 42 other states,
this company agreed to destroy the
In another case where the Bureau took action against a Bucks
County based national seller of computers, the Office made
certain that the settlement prohibited the sale or other disclosure
of customer information.
In another legal action, this Office reached an Assurance
of Voluntary Compliance with a Bucks County developer and distributor
of computer games to resolve alleged violations related to
the company's use of "spyware" in its computer games.
Customers who purchased the product were unaware that the games
included a computer file attachment which allowed third party
advertisers to secretly interact with the consumers' computers
and trace their steps on the Internet. Asserting that this
conduct violated consumer privacy rights, the Commonwealth
secured an agreement from the business barring the inclusion
of such programs in its products and requiring the company
to provide a means for customers to remove the software program
from previously purchased products.
Once again, thank you for the opportunity to comment today
on the Bureau of Consumer Protection's efforts to assist consumers
in preventing the growing problem of identity theft and I want
to commend Congress for its recent enactment of the Fair and
Accurate Credit Transactions Act which should further assist
consumers in combating this problem.
I would be happy to take any questions.