Friday, July 20, 2007

Identity Theft Enforcement and Restitution Act of 2007

The federal government is proposing an additional resolution to combat identity theft in both private and public sectors. Today, the Department of Justice handed over to Congress their proposed legislation for a revised "Identity Theft Enforcement and Restitution Act of 2007". This plan, adding to the arsenal of already tough laws in place to combat the increasingly expensive white collar crime, was a recommendation from the contents of the President’s Task Force on Identity Theft, released in April 2007.

In addition to helping victims recover more quickly from the significant time and cost involved in restoring their identity, The Department of Justice states, “The new legislation would also close gaps in the current identity theft, and aggravated identity theft statutes. Both of these statutes are limited to stealing the identity of an individual, and do not specifically address the misuses of identification of a corporation or organization.”

As thieves become more sophisticated and technology driven businesses become increasingly more vulnerable to attack, these laws may prove more costly for small and medium-sized businesses then for the consumer. Though most companies are aware of the compliance issues they face, many companies are willing to risk the relative costs, averaging $160,000, to comply with the now two-year-old laws currently in effect. If the “Identity Theft Enforcement and Restitution Act of 2007” doesn’t encourage businesses to act now, they might just be facing stronger penalties if caught. Although, it may not be a matter of if, but when!

Texas Attorney General Greg Abbott, at the forefront of the identity theft pandemic, stated, “The Office of the Attorney General will take all necessary steps to ensure that consumers are protected from identity thieves.” These steps proved punishment for RadioShack, on April 2, 2007, for violating FACTA laws, “requiring businesses to protect any consumer records that contain sensitive information.” The charges were penalties of up to $50,000 per violation and may face additional civil penalties. Fines for companies who are either caught for non-compliance or have suffered a security breach, could shell out hundred of thousands more dollars and possible imprisonment.

Attorney General Abbott’s crack down on non-compliant companies, has proved steep for the bottom line of many companies in recent months; On Track Modeling, a North Carolina-based talent agency, Easy Pawn, and Jones Beauty College in Dallas.