March 2, 2006 11:21 AM PST

Phone-record scam bills cleared for final votes

WASHINGTON--Two proposals designed to toss convicted phone-record thieves in prison on Thursday inched closer to becoming law.

After only six minutes of discussion, the U.S. House of Representatives' Judiciary Committee unanimously approved the Law Enforcement and Phone Privacy Protection Act, a measure proposed just three weeks ago by five Republicans and four Democrats. A companion bill introduced in January by Sen. Chuck Schumer, a New York Democrat, also passed unanimously in the Senate Judiciary Committee.

The committees' rapid approval of the bills is another example of Congress' keen interest in taking a stand on the issue, with politicians visibly incensed by recent reports that online brokers are "pretexting"--that is, posing as legitimate customers--to obtain phone records and then sell them on the Web for an average of $100.

"Few things are more personal or potentially more revealing than our phone records," Rep. Lamar Smith of Texas, one of the House bill's chief Republican sponsors, said at his committee's business meeting.

It's not clear, however, that any new laws are necessary. The Federal Trade Commission, for example, has for decades enjoyed the power to stop "deceptive" business practices, a term that also encompasses fraudulent behavior. In addition, state attorneys general have the ability to file civil and criminal suits to halt illicit business practices.

A number of cell phone companies, including T-Mobile and Sprint Nextel, have already filed suit--and won temporary relief--against some of the companies accused of pretexting.

But Smith said Thursday that current federal statutes are "inadequate" and that new criminal penalties are needed to supplement such civil actions. "It sends a clear signal that these breaches of privacy will not be tolerated," he said.

Both measures would impose prison time and fines for anyone found guilty of fitting in one or more categories: knowingly obtaining phone records through fraudulent means; selling, transferring, or attempting to sell or transfer such records without the customer's consent; and purchasing such records with the knowledge that they were obtained illicitly.

The House bill proposes slightly stiffer penalties than the Senate one, imposing up to 20 years in prison for obtaining the records and up to five years for the other offenses. The Senate bill proposes up to five years of prison time for all of the offenses.

Both allow for "enhanced" penalties if the offenses are committed in conjunction with other crimes, particularly violent ones. They also carve out an exemption for law enforcement officials to continue to obtain confidential phone records for investigations "in accordance with applicable laws."

Each bill now awaits final approval in floor votes. Four related bills are still pending in House and Senate committees.

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