WASHINGTON—The Financial Services Roundtable (FSR) today praised Senate introduction of the Protecting Children from Identity Theft Act, bipartisan legislation to combat the growing threat of synthetic identity fraud. This needed bill should be included in the final text of a manager’s amendment to Chairman Crapo’s (R-ID) regulatory modernization package.
“The financial industry is continually looking for new ways to enhance its ability to better protect children from synthetic identity fraud,” said FSR’s Vice President of Government Affairs, Jason Kratovil. “This bipartisan and common sense bill, which would modernize an existing system to allow financial companies to validate an applicant’s name, date-of-birth and Social Security number, should be added to Sen. Crapo’s regulatory modernization package and quickly advanced to the President’s desk.”
Synthetic identity fraud differs from more traditional identity theft in that it involves the use by a fraudster of a valid Social Security number – most often that of a minor – and fictitious information to create a “synthetic” credit file. That credit file is used over time to apply for credit and commit fraud. Many years later, the child will be forced to clean up the mess created by the fraudulent use of her SSN when she was very young. This fraud can be prevented if financial institutions were able to validate with a source of truth – in this case, the Social Security Administration – whether or not the given information on an application matches. This legislation would make that possible, with the electronic consent of the consumer.
The Protecting Children from Identity Theft Act was introduced today by Senators Cassidy (R-LA) , McCaskill (D-MO), Scott (R-SC), and Peters (D-MI). Last month, FSR commended the same group of Senators for urging SSA to combat synthetic identity fraud by modernizing its infrastructure to enable real-time validation of Social Security Numbers.
