The Financial Identity Fraud & Identity Theft Protection Act
To combat the growing problems of identity theft and fraud, the South Carolina legislature passed the Financial Identity Fraud and Identity Theft Protection Act in 2008. Governor Mark Sanford signed the bill into law and it took full effect in July 2009. The Act covers security breaches, consumer protections and record keeping procedures.
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Reason For The Act
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According to statistics from the Federal Trade Commission, the state of South Carolina had 2,670 reported instances of identity theft during 2007. The state ranked number 30 of the 50 U.S. states for the number of identity theft complaints per capita with 60 for every 100,000 residents; 21 percent of the reports involved credit card fraud while phone or utility related fraud accounted for 19 percent of the complaints.
How Fraud Occurs
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Criminals access individual's information in a variety of different ways but the South Carolina legislature identified dishonest employees, hoaxers and Internet phishers as among the leading types of scam artists. Dishonest employees at retail stores and banks can misuse confidential customer information. Hoaxers masquerading as bank employees often trick bank customer's into revealing personal information. Internet phishing scams often involve someone receiving an unsolicited email that directs them to transmit funds to a supposedly long lost relative.
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Act Provisions
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The Act requires businesses operating in South Carolina to safeguard consumer information in a variety of different ways. Businesses cannot make available, print or require a customer to transmit six of more digits of their Social Security number. Additionally, businesses must provide a statement explaining the legal purpose for collecting the Social Security numbers of individuals. Businesses must shred or destroy records containing people's names, ID numbers, Social Security numbers and financial account numbers after using the information for legally valid purposes.
Impact Of The Act
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The Act protects residents of South Carolina who share private information when conducting activities for their own benefit or for the benefit of a family member or their household. Creditors must notify affected customers and the three main credit bureaus when security breaches occur and notify the state when 1,000 people are impacted at one time. Businesses that do not comply with the law face fines of up to three times the amount of damages incurred by affected consumers in addition to covering legal costs and paying a $1,000 fine.
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