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Washington, D.C. – U.S. Senator Mike Enzi, R-Wyo., said helping consumers understand what information credit reporting agencies retain and the importance of looking for and correcting inaccuracies will help slow the increasing rate of identity theft crimes - such as a person using another's credit card without authorization or other ways to fraudulently ruin credit.

Enzi emphasized the impact of identity theft crimes on small retailers, the ability of consumers to correct errors on their credit reports and the accuracy of a consumer's data when the consumer is also a small business. Enzi made the comments at a Senate Banking Committee hearing today to address the accuracy of credit report information and the Fair Credit Reporting Act.

"The accuracy of the financial information collected, maintained, and delivered by the credit reporting agencies is vital to ensuring the integrity of our entire financial system," said Enzi, a member of the Senate Banking Committee. "Providing consumers with accurate and timely credit reporting information will help consumers, merchants and financial institutions stem the explosion of identity theft crimes."

Enzi cosponsored legislation passed unanimously by the Senate last November to prevent identity theft, mitigate harm and restore credit to victims of that crime. The House adjourned before acting on the bill, but Enzi hopes the Senate's unanimous support last year will increase the chance of certain provisions of his bill becoming law as part of the reauthorization of the Fair Credit Reporting Act this year.

Senator Enzi's opening statement follows.

Opening Statement by Senator Michael B. Enzi
"The Accuracy of Credit Report Information and the Fair Credit Reporting Act"
Senate Committee on Banking, Housing and Urban Development
July 10, 2003

The accuracy of the financial information collected, maintained, and delivered by the credit reporting agencies is vital to ensuring the integrity of our entire financial system. I was very pleased to hear Secretary Snow of the Department of Treasury announce last week that the Administration supports making free credit reports available annually to consumers.

This will go a long way to helping consumers to understand what information is retained by the credit reporting agencies, to see if there are any inaccuracies in the information, and to correct that information. The accuracy and timeliness of the information will help consumers, merchants and financial institutions to stem the explosion of identity theft crimes.

I also want to mention two articles that I believe highlight the problems that we face with identity thefts. The first article was a front page article in the Wall Street Journal on May 1 entitled, "A Tussle Over Who Pays For Credit-Card Theft - Retailers Stuck With Bill, Say Issuers Lack a Reason to Fight." The second appeared recently in Parade Magazine.

I am very concerned about the situations highlighted in the Wall Street Journal article where victims of identity theft struggle to retain their identities and the credit card industry appears to offer little help in pursuing the criminals. Further, it is troublesome that the retailers, most likely small business retailers, may get stuck with the costs of the crime. The financial cost of identity theft is growing at an alarming rate, and we have to find ways to encourage credit card companies to track down fraudsters and help retailers recover damages. Therefore, I would like to hear from Chairman Muris as to what the Federal Trade Commission is doing to bring credit card companies to the table and what the Commission is doing to help small retailers cope with identity theft.

With regard to the Parade Magazine article, my colleagues will remember Captain John Harrison who testified at our June19th Hearing. The article illustrates the trauma that Captain Harrison has experienced as a victim of identity theft since July 27, 2001. For nearly two years, Captain Harrison has been trying to clear his good name. That means closing over 60 fraudulent accounts that range from credit cards to checking accounts to utilities. And, those are just the ones he knows about. Captain Harrison is still learning about open and damaging accounts.

Captain Harrison is just one individual whose life has been turned upside down due to identity theft. There are hundreds of thousands more out there. We have to do something to help these victims get back on their feet in a timely manner.

Last year, Senator Cantwell and I introduced a bill that would assist victims in their reclaiming their identities. The bill passed unanimously last November, and I would like to work with our esteemed Chairman to include parts of that bill in the reauthorization of the FCRA. Some of those parts may be similar to the changes proposed by the Administration related to the accuracy of information in a consumer's file. I am particularly interested in the Administration's proposal related to the blocking of files and reinvestigations by resellers. Senator Cantwell and I worked last year with all of the stakeholders to address these issues in our bill, and I would appreciate the opinion of Chairman Muris and the other panelists on the Administration's proposal.

In addition, I believe we need to discuss the accuracy of a consumer's data when the consumer is also a small business. According to the Small Business Administration, there are millions of small business that are sole proprietors. Over the past decade, there has been a very good campaign on the part of financial institutions to market products and services to small businesses owners. This has made credit available to many sole proprietors that otherwise would not have been able to obtain credit elsewhere. I would like to hear from today's witnesses as to how we can maintain the accuracy of consumer's financial information if the consumer also owns a business.

Mr. Chairman, thank you again for holding this hearing. I look forward to hearing from the witnesses.