WASHINGTON, D.C. - Congressmen Jerry Kleczka and Paul Ryan yesterday introduced a bill that will make sure customers are notified as soon as possible if their bank discovers that their personal financial information has been stolen.

Kleczka, a long-time proponent of privacy protection, sponsored the Identity Theft Consumer Notification Act (HR 5474) after it was discovered that over 250 bank customers had personal information stolen in southeastern Wisconsin. Compounding the violation was the fact that the customers were not told that their personal and financial records had been compromised until eight months after bank officials learned of the theft.

In the meantime, those whose information had been stolen had no idea that it had been sold to a ring of identity thieves who were using the financial records to make purchases in the victims’ names, including high-end automobiles.

"Financial institutions owe it to their customers to quickly tell them if their privacy has been violated so they can take steps to minimize risks to their finances and repair any damage that has been done," Kleczka said. "Identity theft undermines one’s sense of security and those banks we regularly trust with this important information have a duty to help their customers who are victimized because of breaches in security."

"If a bank’s safeguards have been breached and customers’ personal information has been compromised, customers have a right to know about it," Ryan said. "All of us count on our financial institutions to protect our confidential data. If there’s a breakdown in their privacy protections, we need to find out right away so we can protect our credit and take action to protect ourselves."

The bill requires financial institutions to promptly notify customers of any compromise in the security of their personal information and provide assistance to such customers in correcting any damage to their credit ratings. These banks also would have to reimburse the customer for any losses incurred as a result of the identity theft. Once a year, financial institutions would be required to notify their customers of these rights in writing.

Financial institutions also would face a number of penalties if they fail to notify customers in a timely manner. These penalties could include the removal of loss of status as a federally insured deposit institution as well as civil fines. However, in order to protect an active investigation, law enforcement officials would be able to request a temporary waiver of disclosure from these regulations.

"Identity theft is often a silent, hidden crime until the information is used to purchase goods or services in the victim’s name. By then it is too late, and the victims have to face the difficulty of clearing their names and recovering their good credit history," Kleczka said. "This bill will help reduce the long-term effects of identity theft by ensuring that customers know as soon as possible when their personal information has been compromised. With this knowledge they can take steps to protect their finances and credit."

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