Prevent Identity Theft From Affecting Lives and Livelihoods (PITFALL) Act - Amends the Truth in Lending Act to provide nonliability for victims of identity theft following issuance of a no-fault letter by a State agency upon completion of its investigation into the matter.
Cites duties of a creditor with respect to other creditors and credit reporting agencies following receipt of such State-issued no-fault letter.
Amends the Fair Credit Reporting Act to prohibit a consumer reporting agency from including or maintaining information concerning any transaction involved in the identity theft with respect to which such no-fault letter has been issued.
Cites duties of a consumer reporting agency with respect to other creditors and credit reporting agencies following receipt of such State-issued no-fault letter.
Amends the Fair Debt Collection Practices Act to set forth the duties of a debt collector following receipt of such a State-issued no-fault letter.
Amends the Electronic Fund Transfer Act to shield a person from liability for any electronic fund transfer with respect to which such no-fault letter has been issued.
Cites duties of a financial institution following receipt of such State-issued no-fault letter.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1749 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 1749
To amend various provisions of the Consumer Credit Protection Act to
provide relief for victims of identity theft, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 16, 2003
Mr. Specter introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend various provisions of the Consumer Credit Protection Act to
provide relief for victims of identity theft, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Prevent Identity Theft From
Affecting Lives and Livelihoods (PITFALL) Act''.
SEC. 2. RELIEF FOR IDENTITY THEFT VICTIMS FROM CREDITORS.
(a) In General.--The Truth in Lending Act is amended by inserting
after section 133 (15 U.S.C. 1643) the following new section:
``Sec. 133A. Nonliability of identity theft victims
``(a) In General.--If--
``(1) a State maintains a procedure that provides for the
investigation by the chief law enforcement officer of the
State, or an official or agency designated by the State, of a
police report by any person alleging identity theft; and
``(2) the officer, official, or agency issues a no-fault
letter upon completion of the investigation stating that such
person was the victim of identity theft with respect to any
creditor,
such person shall not be liable for any credit extended in connection
with the actions that such officer, official, or agency has determined
to be involved in the identity theft, except as otherwise provided in
this section.
``(b) Duties of Creditor.--Upon receiving a copy of a no-fault
letter described in subsection (a)(2) with respect to any person, the
creditor, or any transferee, assignee, or agent of the creditor--
``(1) may not attempt to collect any credit extended in the
name of such person which the no-fault letter identifies as
having resulted from identity theft and shall hold such person
harmless for the obligation (including any real or personal
property of such person in which the terms of any contract or
agreement involved in the identity theft purport to create a
security interest for such credit);
``(2) may not furnish any information to a consumer
reporting agency that identifies such credit as an obligation
of such person;
``(3) shall provide a copy of the no-fault letter (and such
other information as may be appropriate to indicate that the
person is not liable under this section for the obligation)
to--
``(A) any consumer reporting agency to which the
creditor had furnished any such information before the
receipt of a copy of the no-fault letter; and
``(B) any office in which any such security
interest was recorded;
``(4) may not transfer or assign the credit to any other
person, including a debt collector (as defined in section 803),
unless the creditor clearly states that the person in whose
name the credit was extended is not liable for such obligation
under this section;
``(5) shall provide a copy of the no-fault letter (and such
other information as may be appropriate to indicate that the
person is not liable under this section for the obligation) to
any transferee or assignee, including a debt collector (as
defined in section 803), to which the creditor had transferred
or assigned the obligation before the receipt of the no-fault
letter, or any agent acting on behalf of the creditor;
``(6) shall remove any lien filed against any real or
personal property of such person to secure the repayment of any
such credit obligation by such person; and
``(7) shall comply with any requirement the Board and the
Federal Trade Commission may jointly prescribe under this
section.
``(c) Scope of Provision.--The exemptions provided in section 104
shall not apply to this section.
``(d) Administrative and Judicial Review.--Any creditor adversely
affected by the determination by the chief law enforcement officer of
any State, or an official or agency designated by the State, that is
the basis for a no-fault letter described in subsection (a)(2) with
respect to any person may--
``(1) seek any administrative review of such determination
that is available under the law of such State;
``(2) provide such officer, official, or agency with
additional relevant information and request further
investigation of the facts and circumstances involved in the
alleged identity theft and a de novo review of the prior
determination on the basis of any relevant information not
taken into account in making the original determination; or
``(3) bring an action in any appropriate State court in
such State to determine the validity of any claim by the
creditor against such person with respect to any obligation to
which the no-fault letter applies.
``(e) Effective Period.--This section shall cease to apply with
respect to any credit extended to any person as of the earlier of--
``(1) the date that any determination, pursuant to an
administrative review or redetermination under paragraph (1) or
(2) of subsection (d), that such person was not the victim of
identity theft becomes final; or
``(2) the date any decision of any Federal or State court
that such person is obligated for such credit becomes final.
``(f) Definitions.--For purposes of this section, the following
definitions shall apply:
``(1) Identity theft.--The term `identity theft' means a
fraud committed using another person's identifying information,
subject to such further definition as the Board and the Federal Trade
Commission may prescribe, jointly, by regulation.
``(2) Police report.--The term `police report' means a copy
of any official valid report filed by a person with any
appropriate Federal, State, or local government law enforcement
agency, or any comparable official government document that the
Board and the Federal Trade Commission shall jointly prescribe
in regulations, that is subject to a criminal penalty for false
statements.''.
(b) State Enforcement Authority.--Section 130(e) of the Truth in
Lending Act (15 U.S.C. 1640(e)) is amended by inserting ``or section
133A'' after section 129''.
SEC. 3. TREATMENT OF CREDIT AND OTHER INFORMATION IN CASES OF IDENTITY
THEFT.
(a) In General.--The Fair Credit Reporting Act is amended by
inserting after section 605 (15 U.S.C. 1681c) the following new
section:
``Sec. 605A. Treatment of credit and other information in cases of
identity theft
``(a) In General.--If--
``(1) a State maintains a procedure that provides for the
investigation by the chief law enforcement officer of the
State, or an official or agency designated by the State, of a
police report filed by any person alleging identity theft; and
``(2) the officer, official, or agency issues a no-fault
letter upon completion of the investigation stating that such
person was the victim of identity theft,
no information concerning any transaction involved in the identity
theft with respect to such person may be included or maintained by a
consumer reporting agency in any file of such person, except as
otherwise provided in this section or taken into account in connection
with preparing or providing any credit scores or any other risk scores
or predictors relating to the person.
``(b) Duties of Consumer Reporting Agency.--Upon receiving a copy
of a no-fault letter described in subsection (a)(2) with respect to any
person, the consumer reporting agency--
``(1) shall remove any reference to any information
described in subsection (a) that is covered by the no-fault
letter from the file of such person;
``(2) may not provide any such information to any person,
whether or not the information is included in a consumer
report, for any purpose;
``(3) shall notify any user to which the consumer reporting
agency had furnished any such information before the receipt of
a copy of the no-fault letter that--
``(A) such information may not be used by the user
for any purpose; and
``(B) under section 133A or 910A, the person is not
liable for any obligation covered by the no-fault
letter;
``(4) shall provide a copy of the no-fault letter (and such
other information as may be appropriate to indicate that the
person is not liable under section 133A or 910A for the
obligation) to the furnisher of such information to the
consumer reporting agency (unless the no-fault letter was
supplied by the furnisher); and
``(5) shall comply with any requirement the Board and the
Federal Trade Commission may jointly prescribe under this
section.
``(c) Effective Period.--This section shall cease to apply with
respect to any information concerning any person that was covered by a
no-fault letter described in subsection (a) as of the earlier of--
``(1) the date that any determination, pursuant to an
administrative review or redetermination that such person was
not the victim of identity theft becomes final; or
``(2) the date any decision of any Federal or State court
that such person is liable on the obligation to which such
information refers becomes final.
``(d) Definitions.--For purposes of this section (and sections 616,
617, 619, 620, 621, and 624 with respect to information and duties
covered by this section), the following definitions shall apply:
``(1) Consumer reporting agency.--The term `consumer
reporting agency' includes any person which--
``(A) for monetary fees or dues, or on a
cooperative basis, regularly engages in whole or in
part in the practice of assembling or evaluating credit
information or other information on any person for the
purpose of furnishing, to third parties, any written,
oral, or other communication of any information by a
consumer reporting agency bearing on a person's credit
worthiness, credit standing, credit capacity,
character, general reputation, personal
characteristics, or mode of living which is used or
expected to be used or collected in whole or in part
for the purpose of serving as a factor in establishing
the person's eligibility for--
``(i) credit or insurance;
``(ii) employment purposes; or
``(iii) any other purpose authorized under
section 604; and
``(B) uses any means or facility of interstate
commerce for the purpose of preparing or furnishing
such reports.
``(2) Identity theft.--The term `identity theft' means a
fraud committed using another person's identifying information,
subject to such further definition as the Board and the Federal
Trade Commission may prescribe, jointly, by regulation.
``(3) Police report.--The term `police report' means a copy
of any official valid report filed by a person with any
appropriate Federal, State, or local government law enforcement
agency, or any comparable official government document that the
Board and the Federal Trade Commission shall jointly prescribe
in regulations, that is subject to a criminal penalty for false
statements.''.
(b) Technical and Conforming Amendments.--Section 623(a)(1)(A) of
the Fair Credit Reporting Act (15 U.S.C. 1681s-2(a)(1)(A)) is amended--
(1) by striking ``relating to any consumer'' and inserting
``relating to any person'';
(2) by inserting before the period at the end ``or if the
person knows or has reason to know that the information relates
to a transaction involving identity theft''; and
(3) by inserting after the period, the following new
sentence: ``For purposes of the preceding sentence, a person
shall be deemed to know or have reason to know that information
relates to a transaction involving identity theft if the person
knows or reasonably should have known that the information or
the transaction is described in a no-fault letter issued by the
chief law enforcement officer of the State, or an official or
agency designated by the State, in accordance with section
605A(a), as involving identity theft.''.
SEC. 4. DUTIES OF DEBT COLLECTORS IN CASES OF IDENTITY THEFT.
(a) In General.--The Fair Debt Collection Practices Act is amended
by inserting after section 808 (15 U.S.C. 1692f) the following new
section:
``Sec. 808A. Identity theft
``(a) In General.--If--
``(1) a State maintains a procedure that provides for the
investigation by the chief law enforcement officer of the
State, or an official or agency designated by the State, of a
police report filed by any person alleging identity theft; and
``(2) the officer, official, or agency issues a no-fault
letter upon completion of the investigation stating that such
person was the victim of identity theft,
no obligation that is identified in the no-fault letter as being
involved in the identity theft with respect to such person shall be
treated as a debt of such person by any debt collector.
``(b) Duties of Debt Collector.--Upon receiving a copy of a no-
fault described in subsection (a)(2) with respect to any person, a debt
collector--
``(1) may not take any action, or attempt to take any
action, directly or indirectly, against such person to collect
on any obligation that is subject to subsection (a);
``(2) may not take any action, or attempt to take any
action, to enforce any purported interest in any real or
personal property of such person that is securing any such
obligation;
``(3) if the debt collector is acting as an agent of the
creditor or any other person with respect to collecting any
such obligation, shall promptly notify the creditor or other
person of the prohibition under this section on collection and
provide such creditor or other person with a copy of the no-
fault letter; and
``(4) shall comply with any requirement the Board and the
Federal Trade Commission may jointly prescribe under this
section.
``(c) Effective Period.--This section shall cease to apply with
respect to any obligation of any person that was covered by a no-fault
letter described in subsection (a) as of the earlier of--
``(1) the date that any determination, pursuant to an
administrative review or redetermination that such person was
not the victim of identity theft with respect to such
obligation becomes final; or
``(2) the date any decision of any Federal or State court
that such person is liable on the obligation becomes final.
``(d) Definitions.--For purposes of this section (and sections 813
and 814 with respect to obligations and duties covered by this
section), the following definitions shall apply:
``(1) Debt.--The term `debt' includes any obligation or
alleged obligation of any person to pay money, whether or not
such obligation has been reduced to judgment.
``(2) Debt collector.--The term `debt collector' includes
any person described in subparagraphs (A), (B), (C), (D), (E),
or (F) of section 803(6).
``(3) Identity theft.--The term `identity theft' means a
fraud committed using another person's identifying information,
subject to such further definition as the Board and the Federal
Trade Commission may prescribe, jointly, by regulation.
``(4) Police report.--The term `police report' means a copy
of any official valid report filed by a person with any
appropriate Federal, State, or local government law enforcement
agency, or any comparable official government document that the
Board and the Federal Trade Commission shall jointly prescribe
in regulations, that is subject to a criminal penalty for false
statements.''.
(b) State Enforcement Authority.--Section 814 of the Fair Debt
Collection Practices Act (15 U.S.C. 1692l) is amended by adding at the
end the following new subsection:
``(e) State Action for Violations.--
``(1) Authority of states.--In addition to such other
remedies as are provided under State law, whenever the chief
law enforcement officer of a State, or an official or agency
designated by a State, has reason to believe that any person
has violated or is violating this title, the State--
``(A) may bring an action to enjoin such violation;
``(B) may bring an action on behalf of its
residents to recover damages for which the person is
liable to such residents under section 813 as a result
of the violation; and
``(C) in the case of any successful action under
subparagraph (A) or (B), shall be awarded the costs of
the action and reasonable attorney fees as determined
by the court.
``(2) Rights of federal agencies.--
``(A) Notice to federal agency.--The State shall
serve prior written notice of any civil action under
paragraph (1) upon the Federal agency responsible for
enforcement under this section and provide such agency
with a copy of its complaint, except in any case where
such prior notice is not feasible, in which case the
State shall serve such notice immediately upon
instituting such action.
``(B) Intervention.--The Federal agency responsible
for enforcement under this section shall have the
right--
``(i) to intervene in any action referred
to in subparagraph (A);
``(ii) upon so intervening, to be heard on
all matters arising in the action; and
``(iii) to file petitions for appeal.
``(3) Investigatory powers.--For purposes of bringing any
action under this subsection, no provision of this subsection
shall construed as preventing the chief law enforcement
officer, or an official or agency designated by a State, from
exercising the powers conferred on the chief law enforcement
officer or such official by the laws of such State to conduct
investigations or to administer oaths or affirmations or to
compel the attendance of witnesses or the production of
documentary and other evidence.
``(4) Limitation.--Whenever the Federal agency responsible
for enforcement under this section has instituted a civil
action for violation of this title, no State may, during the
pendency of such action, bring an action under this section
against any defendant named in the complaint of such agency for
any violation of this title that is alleged in that
complaint.''.
(c) Technical and Conforming Amendment.--Section 808 of the Fair
Debt Collection Practices Act (15 U.S.C. 1692f) is amended by adding at
the end the following new paragraphs:
``(9) Taking any action, or attempting to take any action,
directly or indirectly, against any person to collect on any
debt after the debt collector knows or has reason to believe
that such person may be the victim of identity theft with
regard to such debt.
``(10) Taking any action, attempting to take any action, or
failing to remedy any prior action to enforce any purported
interest in any real or personal property of a person that is
securing any debt after the debt collector knows or has reason
to believe that such person may be the victim of identity theft
with regard to such debt.''.
SEC. 5. RELIEF FOR IDENTITY THEFT VICTIMS FROM FINANCIAL INSTITUTIONS.
(a) In General.--The Electronic Fund Transfer Act is amended by
inserting after section 910 (15 U.S.C. 1693h) the following new
section:
``Sec. 910A. Nonliability of identity theft victims
``(a) In General.--If--
``(1) a State maintains a procedure that provides for the
investigation by the chief law enforcement officer of the
State, or an official or agency designated by the State, of a
police report by any person alleging identity theft; and
``(2) the officer, official, or agency issues a no-fault
letter upon completion of the investigation stating that such
person was the victim of identity theft with respect to any
electronic fund transfer from an account of such person at a
financial institution,
such person shall not be liable for any electronic fund transfer that
such officer, official, or agency has determined resulted from an
identity theft, except as otherwise provided in this section.
``(b) Duties of Financial Institution.--Upon receiving a copy of a
no-fault letter described in subsection (a)(2) with respect to any
person, a financial institution--
``(1) shall immediately recredit the person's account for
the amount of the electronic fund transfer, together with any
interest due on such amount;
``(2) shall reimburse the account of the person for any
fees imposed on such account in connection with or as a result
of the electronic fund transfer that resulted from identity
theft; and
``(3) shall comply with any requirement the Board and the
Federal Trade Commission may jointly prescribe under this
section.
``(c) Administrative and Judicial Review.--Any financial
institution adversely affected by the determination by the chief law
enforcement officer of any State, or an official or agency designated
by the State, that is the basis for a no-fault letter described in
subsection (a)(2) with respect to any person may--
``(1) seek any administrative review of such determination
that is available under the law of such State;
``(2) provide such officer, official, or agency with
additional relevant information and request further
investigation of the facts and circumstances involved in the
alleged identity theft and a de novo review of the prior
determination on the basis of any relevant information not
taken into account in making the original determination; or
``(3) bring an action in any appropriate State court in
such State to determine the validity of any claim by the
creditor against such person with respect to any obligation to
which the no-fault letter applies.
``(d) Effective Period.--This section shall cease to apply with
respect to any electronic fund transfer extended to any person as of
the earlier of--
``(1) the date that any determination, pursuant to an
administrative review or redetermination under paragraph (1) or
(2) of subsection (c), that such person was not the victim of
identity theft becomes final; or
``(2) the date any decision of any Federal or State court
that such person is obligated for such credit becomes final.
``(e) Definitions.--For purposes of this section, the following
definitions shall apply:
``(1) Identity theft.--The term `identity theft' means a
fraud committed using another person's identifying information,
subject to such further definition as the Board and the Federal
Trade Commission may prescribe, jointly, by regulation.
``(2) Police report.--The term `police report' means a copy
of any official valid report filed by a person with any
appropriate Federal, State, or local government law enforcement
agency, or any comparable official government document that the
Board and the Federal Trade Commission shall jointly prescribe
in regulations, that is subject to a criminal penalty for false
statements.''.
(b) State Enforcement Authority.--Section 917 of the Electronic
Fund Transfer Act (15 U.S.C. 1693o) is amended by adding at the end the
following new subsection:
``(d) State Action for Violations.--
``(1) Authority of states.--In addition to such other
remedies as are provided under State law, whenever the chief
law enforcement officer of a State, or an official or agency
designated by a State, has reason to believe that any person
has violated or is violating this title, the State--
``(A) may bring an action to enjoin such violation;
``(B) may bring an action on behalf of its
residents to recover damages for which the person is
liable to such residents under section 915 as a result
of the violation; and
``(C) in the case of any successful action under
subparagraph (A) or (B), shall be awarded the costs of
the action and reasonable attorney fees as determined
by the court.
``(2) Rights of federal agencies.--
``(A) Notice to federal agency.--The State shall
serve prior written notice of any civil action under
paragraph (1) upon the Federal agency responsible for
enforcement under this section and provide such agency
with a copy of its complaint, except in any case where
such prior notice is not feasible, in which case the
State shall serve such notice immediately upon
instituting such action.
``(B) Intervention.--The Federal agency responsible
for enforcement under this section shall have the
right--
``(i) to intervene in any action referred
to in subparagraph (A);
``(ii) upon so intervening, to be heard on
all matters arising in the action; and
``(iii) to file petitions for appeal.
``(3) Investigatory powers.--For purposes of bringing any
action under this subsection, no provision of this subsection
shall construed as preventing the chief law enforcement
officer, or an official or agency designated by a State, from
exercising the powers conferred on the chief law enforcement
officer or such official by the laws of such State to conduct
investigations or to administer oaths or affirmations or to
compel the attendance of witnesses or the production of
documentary and other evidence.
``(4) Limitation.--Whenever the Federal agency responsible
for enforcement under this section has instituted a civil
action for violation of this title, no State may, during the
pendency of such action, bring an action under this section
against any defendant named in the complaint of such agency for
any violation of this title that is alleged in that
complaint.''.
SEC. 6. RULES OF CONSTRUCTION.
(a) Mistake of Fact and Contract Formation.--No provision of any
amendment made by this Act shall be construed as implying that a
contract involving identity theft (as defined in such amendments) is a
valid and enforceable contract with respect to the victim of the
identity theft.
(b) Fraud.--No provision of any amendment made by this Act shall be
construed as implying that any attempt by any person to enforce,
collect on, transfer, or assign a contract when such person knows or
has reason to believe that a purported party to the contract is a
victim of identity theft (as defined in such amendments) with respect
to such contract is not itself a fraudulent or otherwise unlawful act
under any Federal or State law.
(c) Other Action.--No provision of any amendment made by this Act
shall be construed as implying that a person has no obligation to take
any action with respect to any alleged identity theft, including to
correct any record and to absolve any victim of the identity theft for
any liability arising from the theft, whether or not--
(1) a State has in effect any procedure described in
section 133A(a), 605(a), 808A(a), or 910A(a) of the Consumer
Credit Protection Act; or
(2) the chief law enforcement officer of any such State, or
an official or agency designated by the State, has initiated
any investigation or issued any no-fault letter or other
statement pursuant to such procedure.
SEC. 7. CLERICAL AMENDMENTS.
The Consumer Credit Protection Act (15 U.S.C. 1601 et seq.) is
amended--
(1) in the table of sections for chapter 2 of title I, by
inserting after the item relating to section 133 the following
new item:
``133A. Nonliability of identity theft victims.'';
(2) in the table of sections for title VI, by inserting
after the item relating to section 605 the following new item:
``605A. Treatment of credit and other information in cases of identity
theft.'';
(3) in the table of sections for title VIII, by inserting
after the item relating to section 808 the following new item:
``808A. Identity theft.'';
and
(4) in the table of sections for title IX, by inserting
after the item relating to section 910 the following new item:
``910A. Nonliability of identity theft victims.''.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR 10/17/2003 S12746-12747)
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
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