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The Federal Trade Commission today told a House subcommittee that millions of consumers are victims of identity theft each year at a cost of billion of dollars and countless hours of consumers’ time to repair the damage.

In testimony before the House Ways and Means Committee’s Social Security Subcommittee, the agency said helping protect consumers from ID theft and deal with its consequences is a critical part of the FTC’s consumer protection mission. In the testimony, the FTC recommended legislation to help mitigate the identity theft problem by making Social Security numbers less useful to identity thieves and making the numbers harder to access.

The testimony, delivered by Maneesha Mithal, Director of the FTC’s Division of Privacy and Identity Protection, said that businesses; federal, state and local governments; and others, such as universities, use Social Security numbers “to ensure accurate matching of consumers with their information within organizations, to match consumers with information held by other organizations, and to avoid the costs and burdens of establishing different identification systems for each set of consumer records.” The testimony notes that such widespread use of Social Security numbers has made them valuable to identity thieves, who use them to access credit accounts, establish new accounts, apply for government and medical benefits, and perpetrate other forms of identity theft.

The FTC has used a comprehensive, three-pronged program to combat identity theft, the testimony states. It includes law enforcement, data collection and analysis, and consumer and business education.

“Since 2001, the Commission has brought 32 law enforcement actions challenging businesses that failed to reasonably protect sensitive consumer information that they maintained. Several Commission cases have involved breaches of SSNs,” the testimony states.

In addition to law enforcement, the FTC maintains a database of identity theft complaints. The agency analyzes the data to inform its education efforts and help criminal law enforcement authorities, and shares the data with more than 2,000 federal, state, and local law enforcement agencies, the testimony states.

The testimony notes that the FTC receives between 15,000 and 20,000 consumer calls a week about identity theft. Consumers receive help from trained counselors about how they can avoid identity theft or how they can repair the damage if they have become victims. The FTC also provides a variety of consumer and business education materials.

The testimony states that the Commission continues to believe that four legislative initiatives could help deter identity theft and mitigate its effects:

First, in addition to the use of SSNs, “the FTC recommends that Congress consider establishing national consumer authentication standards to verify that consumers are who they purport to be.”

Second, the Commission recommends that Congress “consider creating national standards to reduce the public display and transmission of SSNs, such as by eliminating their unnecessary display on publicly-available documents and identification cards and limiting how they can be transmitted. Such steps would reduce the availability of SSNs to thieves, without hindering the use of SSNs for legitimate identification and data-matching purposes.”

Third, the Commission acknowledges that many organizations possess sensitive consumer information, including SSNs, and believes entities that possess such data should be required to maintain reasonable safeguards. It recommends that Congress adopt national data- security standards.

Finally, the Commission recommends that Congress adopt provisions that would require organizations to notify affected consumers when their data has been breached.

The Commission vote to issue the testimony was 5-0.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.  To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).  The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad.  The FTC’s website provides free information on a variety of consumer topics.  “Like” the FTC on Facebook and “follow” us on Twitter.

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