E7-11049. Agency Information Collection Activities; Submission for OMB Review; Comment Request

AGENCY:

Federal Trade Commission.

ACTION:

Notice.

SUMMARY:

The information collection requirements described below will be submitted to the Office of Management and Budget (“OMB”) for review, as required by the Paperwork Reduction Act (“PRA”). The Federal Trade Commission (“FTC” or “Commission”) is seeking public comments on its proposal to extend through June 30, 2010 the current OMB clearance for information collection requirements contained in its Identity Theft Report Definition Rule (“Rule”). That clearance expires on June 30, 2007.

DATES:

Comments must be filed by July 9, 2007.

ADDRESSES:

Interested parties are invited to submit written comments. Comments should refer to “IDT Report Rule: FTC Matter No. R411011,” to facilitate the organization of comments. A comment filed in paper form should include this reference both in the text and on the envelope and should be mailed or delivered, with two complete copies, to the following address: Federal Trade Commission, Room H-135 (Annex J), 600 Pennsylvania Ave., N.W., Washington, D.C. 20580. Because paper mail in the Washington area and at the Commission is subject to delay, please consider submitting your comments in electronic form, as prescribed below. However, if the comment contains any material for which confidential treatment is requested, it must be filed in paper form, and the first page of the document must be clearly labeled “Confidential.”^[1]

Comments filed in electronic form should be submitted by following the instructions on the web-based form at https://secure.commentworks.com/​ftc-IDTReportRule. To ensure that the Commission considers an electronic comment, you must file it on the web-based form at the https://secure.commentworks.com/​ftc-IDTReportRule weblink. If this notice appears at www.regulations.gov, you may also file an electronic comment through that website. The Commission will consider all comments that regulations.gov forwards to it.

Comments also should be submitted to: Office of Management and Budget, ATTN: Desk Officer for the Federal Trade Commission. Comments should be submitted by facsimile to [phone] because U.S. Postal Mail is subject to lengthy delays due to heightened security precautions.

The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. All timely and responsive public comments will be considered by the Commission and will be available to the public on the FTC website, to the extent practicable, at www.ftc.gov. As a matter of discretion, the FTC makes every effort to remove home contact information for individuals from the public comments it receives before placing those comments on the FTC website. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy at http://www.ftc.gov/​ftc/​privacy.htm.

FOR FURTHER INFORMATION CONTACT:

Requests for additional information should be addressed to Kristin Krause Cohen, Attorney, Division of Privacy and Identity Protection, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, DC 20580, [phone].

SUPPLEMENTARY INFORMATION:

On March 29, 2007, the FTC sought public comments on its proposal to extend through June 30, 2010 its current OMB clearance for information collection contained in the Rule. See 72 FR 14810. No comments were received. Pursuant to the OMB regulations, 5 CFR Part 1320, that implement the PRA, 44 U.S.C. 3501-3520, the FTC is providing this second opportunity for public comment while seeking OMB approval to extend the existing paperwork clearance for the Rule. All comments should be filed as prescribed in the ADDRESSES section above, and must be received on or before July 9, 2007.

The Identity Theft Report Definition Rule, 16 CFR Part 603, was promulgated pursuant to the Fair and Accurate Credit Transactions Act of 2003 (“FACT Act” or the “Act”), Pub.L. 108-159 (December 4, 2003), amending the Fair Credit Reporting Act, which established requirements for consumer reporting agencies, creditors, and others to help remedy problems associated with identity theft. Under the Act, an individual can mitigate a number of specific harms resulting from identity theft by providing an identity theft report to consumer reporting agencies and information furnishers. For example, with an identity theft report, an identity theft victim can obtain a seven year fraud alert or seek to block fraudulent information on their credit report. Pursuant to the FACT Act, the Rule defined the term “identity theft report,” 16 CFR 603.3, and became effective on December 1, 2004.

Burden statement:

Staff anticipates that, as both individuals and police departments become increasingly aware of the benefits of obtaining an “identity theft report” under the Act, the number of individuals who ultimately obtain an identity theft report will likely increase because the Rule facilitates a victim’s ability to file a law enforcement report. To estimate that increase and associated effect on paperwork burden, staff has drawn from publicly available survey results that quantify: (a) how many individuals are victimized annually by identity theft; and (b) the frequency in which consumers file related identity theft reports with law enforcement agencies and other third-parties.

In a survey prepared for the Commission by Synovate and issued in September 2003, Federal Trade Commission—Identity Theft Survey Report (Synovate Survey Report),^[2] Synovate stated that there are 9.91 million individuals victimized by identity theft each year.^[3] More recent public data, however, states that in 2006, the number of domestic consumer victims of identity theft totaled 8.9 million,^[4] and staff will apply this latter amount to its projections of increased consumer use of identity theft reports.

The Synovate Survey Report also provided data on the frequency in which consumers file identity theft reports with law enforcement agencies and other third-parties. Staff is unaware of newer publicly available data of this nature. Accordingly, staff will incorporate this previously provided data into its revised estimates of the number of consumers who will obtain identity theft reports.

Based on past years’ experience drawn from the Synovate Survey Report, 26% of all identity theft victims contact a law enforcement agency.^[5] Of those contacting law enforcement officials, 76% file a police report alleging identity theft.^[6] Conversely, 24% of victims who contact a law enforcement agency have not filed a police report. Applying this information to the updated population of identity theft victims, that would amount to 2.314 million individuals contacting a law enforcement agency (8.9 million victims x 26%) of which roughly 555,000 (rounded to the nearest thousand) have not filed a police report. Staff anticipates that the Rule will enable those victims who previously were unable to file reports with local law enforcement to now file reports with a state or federal law enforcement agency.

The Synovate Survey Report stated that 43% of identity theft victims annually contact an information furnisher.^[7] This would amount to 3.827 million victims in a given year (8.9 million victims x 43%). Based on its knowledge of identity theft trends, staff anticipates that the Rule will result in an increase of 10% of these persons, or roughly 383,000, who will now obtain an identity theft report to file with an information furnisher as proof of being an identity theft victim.

In a given year, 3.23 million persons are victims of their personal information being used to open new accounts or to commit other frauds.^[8] Of these victims, approximately 20% — or 646,000 — do not take any action on this misuse.^[9] Based on its knowledge of identity theft trends, staff estimates that the Rule will likely result in 75%, or 485,000, of these victims obtaining identity theft reports.

In sum, then, staff estimates that the Rule will increase by 1.423 million the number of individuals obtaining identity theft reports (555,000 + 383,000 + 485,000).

Estimated total annual hours burden: 545,000 hours (rounded to the nearest thousand)

In its 2004 notice of proposed rulemaking and corresponding submission to OMB, FTC staff estimated, based on the experience of the Commission’s Consumer Response Center, that an individual would spend an average of 5 minutes finding and reviewing filing instructions, 8 minutes filing the law enforcement report with the law enforcement agency, and 5 minutes submitting the law enforcement report and any additional information or documentation to the information furnisher or consumer reporting agency, resulting in an average of 18 minutes for each identity theft report.^[10]

Staff now estimates, based on the ongoing experience of the Commission’s Consumer Response Center, that an individual will spend 5 minutes finding and reviewing filing instructions, 13 minutes filing the law enforcement report with the law enforcement agency (due to added entry fields), and 5 minutes submitting the law enforcement report and any additional information or documentation to the information furnisher or consumer reporting agency, resulting in an average of 23 minutes for each identity theft report. Thus, the annual information collection burden for the estimated 1.423 million new identity theft reports due to the Rule will be 545,000 hours, rounded to the nearest thousand (1.423 million x 23 minutes ÷ 60 minutes/hour).

Estimated labor costs: $10,802,000 (rounded to the nearest thousand)

Commission staff derived labor costs by applying appropriate hourly cost figures to the burden hours described above. Based on Bureau of Labor Statistics data, further adjusted for inflation, the average national hourly wage for individuals is $19.82.^[11] Applied to 545,000 total burden hours yields an estimated $10,802,000 in cumulative labor costs for all those who will newly obtain identity theft reports ($19.82 x 545,000 hours) as a projected result of the Rule.

Estimated annual non-labor cost burden: $0 or minimal

Staff believes that the Rule’s paperwork burden imposes negligible capital or other non-labor costs, as an identity theft victim is likely to have the necessary supplies and/or equipment already (telephone, computer, paper, envelopes) for purposes of obtaining the identity theft report and submitting it to information furnishers or consumer reporting agencies.

William Blumenthal

General Counsel

Footnotes

1.  Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be accompanied by an explicit request for confidential treatment, including the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. The request will be granted or denied by the Commission's General Counsel, consistent with applicable law and the public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).

2. See Synovate Survey Report at http://www.ftc.gov/​os/​2003/​09/​synovatereport.pdf.

3.  Synovate Survey Report at 7.

4.  See http://www.privacyrights.org/​ar/​idtheftsurveys.htm (summarizing findings of the January 2006 Javelin Strategy and Research 2006 Identity Fraud Survey Report).

5.  Synovate Survey Report at 59.

6.  Id.

7. Id. at 50.

8. Id. at 7. Absent newer data on this point, staff refers to and applies this Synovate-provided data.

9. Based upon staff’s analysis of data collected in the Synovate Survey Report, these types of victims constitute 20% of such victims.

10. These estimates take into account that the time required to file the report will vary depending on the law enforcement agency used by the individual.

11. An hourly rate of $18.62 was drawn from average annual Bureau of Labor Statistics National Compensation Survey data, June 2005 (with 2005 as the most recent whole year information available, and June the focal median point), http://www.bls.gov/​ncs/​ocs/​sp/​ncbl0832.pdf (Table 1.1). Further adjusted by a multiplier of 1.06426 (a compounding for approximate wage inflation for 2005 and 2006, based on the BLS Employment Cost Index), the revised hourly wage is $19.82.