New bipartisan bill in US Congress aims to crack down on digital identity theft, fraud

Bipartisan legislation newly introduced in U.S. Congress aims to “strengthen America’s digital identity infrastructure and protect individuals, businesses, and government programs from rapidly rising identity fraud and theft,” says a release from U.S. Congressman Bill Foster (D-IL), a co-sponsor of the bill.

The law, HR 7270, would establish an identity fraud prevention innovation grant program for states, which would see the Treasury Department supporting digital transformation, including the development of secure digital credentials like mobile driver’s licenses (mDL), and defenses against generative AI-related deepfake threats.

Congressman Pete Sessions (R-TX) joins Foster in sponsoring the legislation, which aims to institute a “government-wide approach to addressing vulnerabilities in online identity verification that are increasingly exploited by organized criminal networks and hostile nation-states.”

Per the release, the bill builds on work already directed by Congress for the National Institute of Standards and Technology (NIST) to develop voluntary digital identity guidelines, “while recognizing that many states and local agencies lack the resources to implement them.” In effect, it provides a financial complement to the evolving NIST guidelines, which will be necessary for widespread success.

“It is important that Congress responds to the growing wave of identity theft and fraud in the United States by strengthening our digital identity infrastructure,” says Foster. This is in keeping with the congressman’s efforts on digital identity, which have included pushing for the development of a federal agency to oversee identity security and the deployment of related technologies. Foster previously introduced the Improving Digital Identity Act, which calls for “consent-based digital identity solutions” for identity verification and authentication.

The congressman gave a keynote as part of last week’s FIDO Identity & Policy Forum, in which he explains his thinking behind the new bill, saying that the emergence of agentic AI is a major motivator. He points to NIST’s efforts under the Obama administration, which “defined the standards for presentation of secure, privacy preserving digital ID, which have been adopted worldwide.” Foster says there’s a chance for the U.S. to do the same for agentic communication.

Foster also confirms that deepfakes are still a major problem, and high on legislators’ radar. “It is a big deal,” he says. “People are falling in love with their chatbots. And you’re going to have this taking place at scale, with chatbots designed to get people to fall in love with them, and then talk them into going to empty their savings into the nearby Bitcoin ATM.”

Fraud continues to evolve, taking chunks out of US economy

Sessions notes that “identity fraud is one of the fastest growing threats facing American families, our financial system, and the integrity of government programs. Criminal organizations and hostile nation-states are exploiting outdated identity systems, costing taxpayers hundreds of billions of dollars and putting Americans’ personal information at risk. I am grateful to Congressman Foster for co-leading this important, bipartisan legislation, and for his partnership in advancing common sense solutions that strengthen security and protect privacy.”

The legislation has the endorsement of the Better Identity Coalition, with the organization’s coordinator, Jeremy Grant, declaring himself “thrilled” to see the congressmen “put forth common sense legislation to help Americans better protect their security and privacy in the digital world.”

“Millions of Americans are victims of identity theft and fraud each year, leading to billions of dollars in losses, because it is far too easy for criminals and hostile nation-states to compromise the tools we use to protect identity online.”

Government data shows identity theft and fraud continuing to impose huge costs on the U.S. economy. The Government Accountability Office estimates that federal programs could lose between 233 billion and 521 billion dollars annually to fraud. A significant portion of that is linked to identity.

Participation in the scheme will remain optional for states and individuals: the so-called Stop Identity Fraud and Identity Theft Act “does not mandate digital identification, does not eliminate physical credentials, and does not require any individual to obtain or use a digital driver’s license or digital identity.”

Article Topics

Better Identity Coalition  |  digital ID  |  digital ID infrastructure  |  identity theft  |  identity verification  |  legislation  |  mDL (mobile driver's license)  |  synthetic identity fraud  |  U.S. Government