Threat of identity theft brings legislative response

02/25/2005

Conrad Defiebre, Star Tribune
February 25, 2005

Proposed laws requiring data-warehousing firms to notify people whose personal information is compromised are only the beginning of a government response to the burgeoning problem of identity theft, two DFL legislators said Thursday.

Sen. Satveer Chaudhary of Fridley and Rep. Jim Davnie of Minneapolis said their bill, drafted by state Attorney General Mike Hatch, will be formally introduced Monday.

“This is really just a stopgap measure,” Chaudhary said at a State Capitol news conference. “We need to address broader questions of data security. The Federal Trade Commission estimates that there are 10 million cases of identity theft a year, and the problem is going to grow.”

Attention was newly focused on identity theft with the disclosure last week by ChoicePoint Inc. that thieves may have accessed computerized records such as Social Security and credit account numbers of 144,778 people throughout the nation, including 2,338 in Minnesota.

ChoicePoint, in existence for only eight years, has 19 billion records in its database in Alpharetta, Ga.—enough, Chaudhary said, to paper over the world three times.

“Minnesotans cannot avoid having their private data held in these databases and cannot opt out of these databases,” Davnie said. “Consumers should expect prompt notification regarding an incident that could put them at risk.”

ChoicePoint has announced plans to inform all those affected by its security breach and to give them one-year subscriptions to a credit-monitoring service. But Chaudhary said Minnesota legislation still is necessary because the firm at first notified consumers only in California, where current law requires it.

The legislators said ChoicePoint learned of the breach last fall but withheld notification so as not to compromise a police investigation. California law allows such a delay, as would the Minnesota proposal.

“We have a message for identity thieves who would prey on Minnesotans,” Chaudhary said. “People are going to be informed, police are going to be informed and you will be caught.”

Democrats in Congress also have proposed new curbs on the data-brokering industry, and Senate hearings are planned. Chaudhary said he expects state Senate hearings in the near future.

According to the U.S. Postal Inspection Service, identity theft cost the nation about $5 billion last year. A 2003 study found that it costs the average victim of nearly $16,000 and at least 600 hours over several years to repair damaged credit. Davnie said he plans to introduce a comprehensive bill dealing with the problem later this year.