Governor Paterson Unveils Legislation to Strengthen New York's ID Theft Laws

Governor David A. Paterson today announced that he has introduced legislation that would strengthen New York State's identity theft laws by protecting individuals from the misuse of their personal information. In recent years, identity theft has prompted frequent legislative action, but significant gaps remain in New York State's identity theft laws.

"The consequences of identity theft can be devastating and far-reaching," said Governor Paterson. "This legislation recognizes the new risks facing consumers today and puts a number of critical safeguards in place to help the people of New York State protect their credit and their good names."

Governor Paterson noted that victims of identity theft face an arduous task in repairing their financial records, credit rating, and wellbeing. They require assistance and intervention to address their particular needs and navigate various public and private systems. This legislation was created to specifically help address this problem in numerous ways.

The bill would restrict the ability of employers to use an employee's personal information, including prohibiting employers from posting or displaying more than the last four digits of an employee's social security number, or placing social security numbers in files with open access. This will provide important confidentiality safeguards for employees. The bill also authorizes New York residents to protect their personal data by having their names placed on an "exclusion list" maintained by information brokers.

In addition, the legislation outlaws the possession of "skimmer" devices -- which can obtain personal identifying information from credit cards -- under circumstances where there is intent to use the device to commit identity theft.

The legislation would enable victims of identity theft to seek assistance from the Consumer Protection Board's (CPB) Identity Theft Prevention and Mitigation Program. The program will serve to assist victims in undoing the damage that the identity thief has done to their financial and credit history. The bill strengthens aspects of the security freeze law (a 2006 law that gives consumers the choice to "freeze" or lock access to their credit file against anyone trying to open up a new account or to get new credit in their name) and extends important confidentiality protections to public entities to prevent the intentional communication of social security numbers to the public.

Finally, the bill enables victims of identity theft to obtain restitution for the value of the time they spend fixing the damage that the criminal has inflicted. According to one study, identity theft victims spent 330 hours in addressing the damage caused by the identity thief. For the first time, these victims will be able to be compensated for their lost time.

Identity theft is the most common consumer fraud complaint, and the fastest growing financial crime, affecting approximately 10 million Americans each year. In 2007, the Identity Theft Data Clearinghouse of the Federal Trade Commission (FTC) ranked New York sixth in the country in per capita identity theft complaints. Furthermore, data security issues are making frequent headlines as highlighted by this past winter's data breach involving the Hannaford Brothers supermarket chain. The heightened level of vulnerability and exposure created by the compilation of large electronic databases necessitates a greater level of risk sensitivity.

"Identity theft is a growing problem with severe consequences," said Governor Paterson. "Victims face significant financial losses and complicated credit problems that often take years to correct. Despite the magnitude of the problem, victims of identity theft and financial fraud face barriers in receiving important assistance, information, and resources. The measures I have proposed today address the particular needs of identity theft victims."