Explore real solutions—Vote NO for ID theft sentencing enhancements and consider solutions that work.

HB 941 would enhance the penalty for identity theft from a state jail felony to a third degree felony, increasing the possible prison time from two years to ten years. Those eight additional years will cost the state tens of millions over time, with no demonstrated effect on the crime.

ID theft is already a crime but criminal penalties have not reduced the incidence

ID theft is already a crime with up to two years of jail time in Texas, assuming no other crime is committed with the information (in which case theft or fraud can also be charged). Where a particular behavior is already a felony, creating another enhanced penalty does not create a better social policy for Texas—but it will ensure thousands of new person-years in Texas’ already over crowded prison system.

Texas Taxpayers cannot afford HB 941

The state of Texas already pays $2.5 billion annually to incarcerate its prisoners, and HB 941 will cost the state millions more. In 2005, 26,624 incidences of identity theft were reported in Texas. If the state successfully prosecutes just 1% of these cases each year after HB 941 passes, the state will pay at least an additional $4.2 million for every additional year added to the sentences. Year after year, this expense will balloon, while ID theft will continue.

HB 941 ignores simple, inexpensive solutions to identity theft

Identity theft remains a problem because it is lucrative. As long as it is lucrative, there will be many people defrauding others.

Security expert Bruce Schneier says: “Right now, the economic incentives result in financial institutions that are so eager to allow transactions -- new credit cards, cash transfers, whatever -- that they're not paying enough attention to fraudulent transactions. They've pushed the costs for fraud onto the merchants. But if they're liable for losses and damages to legitimate users, they'll pay more attention. And they'll mitigate the risks. Security can do all sorts of things, once the economic incentives to apply them are there.”

To solve the problem of identity theft, the state must do everything it can to prevent the theft of personal information before it happens. Texas should do the following:

·   Regulate the way sensitive electronic data is handled. Simple security procedures can prevent the release of sensitive information. This can be achieved at no cost to the state, and would reduce the theft of electronic identity theft dramatically. There is currently no standardized method for businesses to manage the personal information of their customers.

·   Give Texans the tools they need to prevent information from resulting in theft. Enact a security freeze law for all Texans, not just those who have already been victimized, so that we can stop thieves from opening new accounts in our name and charge against them.

·   Hold companies liable for consumer losses. Credit card companies already hold consumer losses due to credit card fraud to $50, and liability for loss has created incentives for better record handling practices.

·   Provide state documentation for victims of ID theft. Many states have standardized forms for victims of identity theft designed to help them reclaim their lives and demonstrate to a court or creditor that they are not the same person as the fraudster.

Compensate victims

Currently, Texas has no system for victim compensation. Those affected by identity theft have few ways to establish their innocence and reassert control over their information. People want their lives back, and compensation for their losses.