ID theft center planned

Victims of identity theft who do business with the nation’s 100 biggest financial institutions will have a one-stop center to help alert their creditors to the crime, under a program Wells Fargo & Co. announced Tuesday.

Edward Epstein, San Francisco Chronicle Washington Bureau

Wells Fargo’s announcement of the Identity Theft Assistance Center came as the Senate prepared to open debate on new legislation that would gut part of California’s new financial privacy law.

The measure proposes to override the state’s law blocking financial institutions from sharing customers’ information with affiliated companies without the customers’ permission.

Consumer groups and California’s two senators, Democrats Barbara Boxer and Dianne Feinstein, say that such data sharing feeds the growing crime of ID theft, a charge the financial industry contests.

The proposed renewal of the fair credit reporting law before Congress would extend the existing federal pre-emption against California’s financial privacy safeguards. Proponents of the federal legislation say it will help make consumer loans more available and includes several provisions to strengthen federal ID theft laws.

"The Identity Theft Assistance Center will offer a single point of contact for victims of identity theft and transfer information to law enforcement,” said Timothy Muris, chairman of the Federal Trade Commission.

He appeared alongside Wells Fargo Chairman Dick Kovacevich, who said his bank, which is based in San Francisco, will operate the center on a pilot basis for a year on behalf of all 100 members of the Financial Services Roundtable, the group that represents companies that account for 70 percent of the country’s lending activity. The center should open next May.

Under the program, consumers who suspect they are victims of ID theft will notify their bank or credit card issuer, which will ask them to fill out a new, uniform report on the incident. With the consumer’s permission, the institution will forward the report to the Wells Fargo center, which will probably be located in Phoenix.

Wells Fargo will make reports to the appropriate law enforcement agencies on the consumer’s behalf, search for patterns in theft reports that can help crack cases and gather data on how widespread ID theft really is.

The FTC estimates that there were 9.9 million cases last year, costing consumers and companies $53 billion.

"The bottom line is we agree that financial institutions need to provide a single point of contact,” said Kovacevich.

He said he couldn’t estimate how much the center would cost Wells Fargo, nor how many employees would be needed to operate it. At the end of a year, the bank and the Financial Services Roundtable will consult on how to continue the center’s operation.

The new federal fair credit law’s pre-emption of California’s ban on information sharing among affiliated companies has been assailed by such national groups as AARP and the Consumers Union.

Feinstein and Boxer have proposed an amendment that would make California’s financial privacy standard the national rule.

The California legislators, who admit they face an uphill fight, are awaiting word from Senate Majority Leader Bill Frist, R-Tenn., about when the bill will come to the floor. Debate and votes are expected this week.

Boxer and Feinstein won’t rule out a filibuster, but that would require the senators to muster at least 40 votes against efforts to force a vote, which could be hard, given the bill’s popularity.

Similar legislation that included the pre-emption of California’s privacy law sailed through the House by 392 to 30 votes last month.

Steve Bartlett, president of the Financial Services Roundtable, said California’s law would hurt consumers by preventing the free flow of financial information that has helped make loans more available.

"It’s a show-stopper for the economy if we don’t have federal pre-emption, ” he said.

He also rejected the charge that affiliate sharing fosters ID theft by sending information to thousands of companies across the nation.

"This legislation will go a long way to preventing ID theft,” he said, arguing that if companies have information about their customers’ spending, saving and investing habits, it would be easier for them to follow up on abuses.

E-mail Edward Epstein at [email protected].

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