CRA-IDT SS rev'd 7-22-09_mtd

Supporting Statement for a Paperwork Reduction Act
Submission to OMB
FTC Focus Group Interviews and Survey of Victims of
Identity Theft Who Contacted Consumer Reporting Agencies
(Control No. 3084-NEW)
PART A - JUSTIFICATION FOR COLLECTION OF INFORMATION
(1)

Necessity for Collecting the Information

The Fair Credit Reporting Act (“FCRA”), as amended by the Fair and Accurate Credit
Transactions Act (“FACT Act”), provides identity theft victims with certain rights, such as the
ability to place fraud alerts on their credit files, designed to assist them in avoiding or mitigating
the harms they suffer as a result of the crime. The Federal Trade Commission (“FTC” or
“Commission”) intends to conduct consumer survey research of experiences of identity theft
victims who interact with consumer reporting agencies (“CRAs”) and who seek to avail
themselves of their FCRA remedies. Such consumer research is necessary to examine the
experiences and satisfaction of victims of identity theft who exercise their FCRA rights; to
assess consumers’ understanding of such rights; to improve the FTC’s consumer education
programs; and to identify issues for further study and investigation.
(2)

Use of the Information

The consumer research will inform and guide the FTC’s future enforcement and
education efforts with respect to FCRA rights for victims of identity theft. For example, if the
information reveals that a substantial number of victims of identity theft are unaware of their
right to a free report or to a fraud alert, staff may have to modify its consumer education efforts
and materials to improve consumer awareness of such rights. The information may also reveal
issues that require further investigation. For example, if victims of identity theft report that
inaccurate information is not permanently removed from their consumer reports, further
investigation by staff may be necessary to determine the reasons for such information not being
removed. The proposed survey will not be nationally or statistically representative. The
information collected will instead be used to improve the FTC’s FCRA-related education and
enforcement programs.
(3)

Consideration of the Use of Information Technology to Reduce Burden

Although use of electronic media to conduct the surveys is theoretically possible, it
would be unfeasible. Use of focus groups will allow for more qualitative questions and answers
that would not likely result from the use of electronic media. In addition, many households
surveyed may lack a computer or the ability to use electronic media. The proposed mail surveys
will be very brief and additional time saved responding through electronic media would be
minimal, if any. Thus, use of electronic methods pursuant to the Government Paperwork
Elimination Act, codified at 44 U.S.C. § 3504 note, would be impractical.
(4)

Effort to Identify Duplication

There is no current information available elsewhere that can be used to explore and
compare consumers’ experiences with CRAs after an incident of identity theft. Efforts to
identify duplicate sources of information included a review of studies, data, hearing transcripts,
news articles, and information found through contacts with consumer groups, governmental
agencies, and academic researchers.
(5)

Efforts to Minimize Burden on Small Organizations
Not applicable. Only individual consumers are being questioned.

(6)

Consequences of Conducing the Collection Less Frequently

This is a onetime collection of information. If this information is not collected, the
Commission will lack information to address important issues and to more effectively target
future law enforcement and consumer education actions. The survey scope and burden has been
reduced as much as possible short of sacrificing the value of the information to be collected.
(7)

Circumstances Requiring Collection Inconsistent With Guidelines

The collection of information in the proposed survey is consistent with all applicable
guidelines contained in 5 C.F.R. § 1320.5(d)(2).
(8)

Consultation with Outside the Agency
a.

Public Comments

As required by section 3506(c)(2) of the Paperwork Reduction Act (“PRA”), 44 U.S.C.
§§ 3501-3521, the FTC published a notice seeking public comment on the proposed collections
of information. See 73 Fed. Reg. 37,457 (July 1, 2008). The Commission received a total of six
comments, five from consumers and one from the Consumer Data Industry Association
(“CDIA”), a trade association that represents the interests of the nationwide CRAs.1
Three of the consumer comments reflected their experiences as victims of identity theft
and two of the consumer comments contained general statements regarding CRAs.
CDIA’s comments acknowledged that surveying consumers is helpful, but raised
concerns regarding the scope and methodology of the proposed research. Regarding the scope of
the survey, CDIA stated that the FTC should also survey consumer experiences when exercising

1

Pursuant to the OMB regulations (5 C.F.R. Part 1320) that implement the PRA, the FTC provided a
second opportunity for public comment. See 73 Fed. Reg. 65,855 (November 5, 2008). The only comment
received in response was CDIA’s resubmission of its original comments.

2

other FACT Act rights and not limit the survey to rights associated with CRAs. To better
address the purposes of this survey and to minimize the burden on consumers, however, the FTC
will focus on those rights associated with CRAs. Although a broader scope may be desirable for
further study or enforcement, the FTC believes that quality of responses will be improved by
focusing on a related group of rights.
CDIA also raised concerns that the research relies too much on consumer recollections
that may erode over time, and that the research will measure consumer perceptions versus actual
experiences. Although consumer recollection may be imperfect, its use is a common and
accepted practice in survey research. Moreover, the FTC is surveying consumers about their
relatively recent experiences when exercising their FACT Act rights. Their recollections should
be relatively fresh, and the FTC believes it is appropriate to rely on them in this consumer
research.
CDIA further expressed concern that the FTC’s reliance for its survey sample on
consumers who have reported data to the FTC’s ID theft clearinghouse will skew the results
because those consumers will not be representative of the general population. Although the FTC
acknowledges this concern, the FTC believes that reliance on consumers who have previously
communicated with the agency is the only economically feasible means to generate a sample of
identity theft victims and to gather information. The 2006 FTC Identity Theft Survey found that
3.7% of Americans had been victims of identity theft in the previous year. In order for a survey
of the general population to reliably contact 4,000 identity theft victims,2 over 100,000
consumers would have to be surveyed. The cost of such a large survey would be prohibitive.
Sending the survey only to consumers who have reported data to the FTC’s ID Theft
Clearinghouse allows the FTC to reach the same number of identity theft victims for a fraction
of the cost.
Further, because the FTC acknowledges that the survey will not be representative of the
general population, it will not attempt to project its results beyond consumers who have reported
to it. Instead, the Commission will use the survey to examine the kinds of problems, if any, that
such consumers experience while exercising their FACT Act rights. As stated above, the
information obtained from the focus groups and the survey will be used to identify areas where
consumer education may be enhanced and where further investigation by staff may be
appropriate to ensure consumers can avail themselves of their FCRA remedies.
b.

Consultation Outside the Agency

The design of the survey incorporates comments from the FTC’s survey consultant,
Manoj Hastak, Ph.D., Associate Professor of Marketing at American University’s Kogod
College of Business Administration in Washington, DC.

2

As discussed in the PRA burden analysis under item 12, staff anticipates mailing the survey to
approximately 3,000 to 4,000 individuals.

3

(9)

Payments and Gifts to Respondents

For participants who will travel to, and participate in, the three 90-minute focus group
interviews, and the three two hour focus groups, a stipend of $75 will be paid. No payments will
be made to consumers receiving the survey by mail.
(10) & (11) Assurances of Confidentiality/Matters of a Sensitive Nature
Responses to the study questionnaire provided to the FTC will not include any
information about the identity of individual respondents. In addition, the contractor will be
required to have sufficient procedures in place to prevent unauthorized access to respondent
information, such as storing personally identifying information on separate servers from
questionnaire response data; using firewalls to secure its servers; and maintaining audit records
of log-ins, file accesses and other security incidents. Finally, this data collection will not include
sensitive questions.
(12)

Estimated Annual Hours Burden

The FTC staff proposes to interview a total of 60 consumers,3 divided into six separate
focus groups of 10 persons each. All 60 of these consumers will spend approximately 90
minutes participating in interviews that relate to their experiences with the CRAs. Thirty of
these 60 consumers will also participate in a 30-minute pretest of the written survey. Thus, the
interview and pretest for these 30 consumers will last approximately 120 minutes.4 The
estimated total burden imposed by the focus groups will be approximately 105 hours.
The FTC’s contractor will ask screener questions of approximately 600 respondents (200
per city) in order to obtain the FTC’s target sample size of 60 individuals. The FTC staff estimates
that it will take respondents two minutes to respond to all of the screener questions and one minute
for respondents who indicate that they are not willing or able to participate in the focus groups.
Staff further estimates that approximately one third of respondents (200) will respond to all of the
questions in the screener, leaving two thirds of respondents (400) whom staff estimates will only
answer the first question and indicate that they are not willing to participate in the interview. Thus,
the estimated total burden related to the screener questions will be approximately13 hours.5

Staff estimates that respondents to the mail survey will require, on average,
approximately 8 minutes to answer the survey (based on anticipated variations among consumers

3

Staff originally proposed focus group interviews of only 30 consumers; however, the need for better
pretesting of the survey, limiting costs, and the benefits of interviewing an additional 30 consumers led staff to
conclude that the number of consumers should be increased to 60.
4

This estimate is based on the estimated 10 minutes it will take to complete the survey, including
pretest questions, and 20 minutes to ask participants questions about the survey.
5

(200 x 2 minutes = 400 minutes) + (400 x 1 minute = 400 minutes) = 800 minutes or 13.3 hours.

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when they interacted with CRAs). For the full survey, the staff intends to mail 3,000-4,000
surveys and anticipates receiving a response rate as high as 30% of the consumer recipients (i.e.,
900 - 1,200 responses). Assuming 1,200 consumers respond to the survey, staff further
estimates the final survey will require approximately 160 hours to complete (1,200 respondents x
8 minutes each). Thus, cumulative burden hours for the clearance would total 278 hours.
(13)

Estimated Annual Cost Burden

The cost per respondent should be negligible. Participation is voluntary, and will not
require any labor expenditures by respondents. There are no capital, start-up, operation,
maintenance, or other similar costs to the respondents.
(14)

Estimated Cost to the Federal Government

The total cost to the Federal government for the information collection will be
approximately $77,180. Of that total cost, staff estimates it will cost $47,130 for a contractor to
review the survey questionnaire, identify the consumers for focus groups, conduct the focus
groups, and draft a report based on the focus group interviews. In addition, staff estimates the
costs of staff time to conduct the competitive bidding, select a contractor for the focus group
interviews, pretest the survey, print and mail the survey, analyze the data, and draft the report to
be approximately $30,050.6 The cost of Commission staff time is necessarily an estimate
because several factors in this calculation may vary, including the number of staff involved and
the actual amount of time required.
(15)

Program Changes or Adjustments
Not applicable.

(16)

Plans for Tabulation and Publication

The results of the surveys will be used to inform the FTC about the experiences of
consumers who are victims of identity theft and who seek to exercise their rights under the
FCRA when they interact with CRAs. An analysis of the information collected will be
conducted by the FTC and summary of findings relating to consumer awareness of their FACTA
Act rights, and their experiences when they seek to utilize such rights, will be released to the
public to inform the consumer education and enforcement efforts of state and federal consumer
protection agencies. The collection of the information will begin after the completion of the
OMB review process.

6

This estimate is based on 450 hours of staff time (Attorneys: 20 hours per week x 6 weeks x 3
attorneys = 360 hours x $70 per hr. = $25,200; Economists: 20 hrs. per week x 3 weeks x 1 economist = 60 hrs
x $60 per hr. = $3,600; Clerical staff: 5 hours per week x 6 weeks x 1 staff = 30 hrs. x $25 per hr. = $ 750.
Postage is estimated to cost approximately $500.

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(17)

Display of Expiration Date for OMB Approval
Not applicable.

(18)

Exceptions to Certification
Not applicable.

PART B - COLLECTION OF INFORMATION METHODOLOGY
(1)

Description of Sampling Methodology

Participants in the focus groups and in the survey will be randomly selected from among
consumers who have communicated with the FTC's Identity Theft Data Clearinghouse between
February 1, 2009 and July 15, 2009. Those included in the study will be limited to persons who
have communicated directly with the FTC and those having U.S. addresses. Two separate
samples will be selected: (1) 3,000 - 4,000 respondents for the general survey; and (2) assuming
a 10% response rate, 600 respondents for the focus group interviews to obtain 60 participants
(again, 30 of whom additionally will be asked to participate in the pretest).
(2)

Description of the Information Collection Procedures

The FTC has hired a contractor to administer the focus group interviews in three
locations. The FTC will send letters to consumers and inquire if the consumers are interested in
participating in the focus group interviews. Within one to two weeks after such letters are sent
to consumers the contractor will contact the consumers by phone to schedule the focus group
interviews and the interviews will be conducted within four weeks after the initial letters are
sent. The focus group interviews will be structured around the topics and questions in the final
moderator’s guide developed by the contractor. Interviews will be viewed by FTC staff and
videotaped by the contractor. The contractor will initiate contact with consumers by phone to
determine if consumers are receptive to participating in the focus group interviews.
In addition, following the focus group interviews, the FTC staff will pretest the survey
through interviews with 30 consumers. After the pretesting, approximately 3,000-4,000 surveys
will be mailed to those consumers who have previously communicated to the FTC and have
contacted one or more of the nationwide CRAs. Consumers will be instructed to return the
completed surveys in a self-addressed stamped envelope to the FTC. Approximately three
weeks after the initial cover letter and survey are mailed, a follow-up letter will be sent to
consumers who have not returned the survey, reminding them to complete the survey. The
survey will seek information about: victims’ experiences when they contacted one or more
CRAs; whether victims received required notice of rights from the CRAs; whether victims
received free credit reports; the ability of victims to place fraud alerts on their credit files and
dispute inaccurate information; and whether victims were able to block information caused by
identity theft. The information from the survey responses will be collected and analyzed by FTC
staff.
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(3)

Methods to Maximize Response Rates/Reliability of Sample Data

As stated above, the contractor will initiate contact with the consumers in the sample
selected for the focus groups to determine if consumers are receptive to participating in the focus
group interviews. Regarding the surveys, FTC staff anticipates a 25-30% response rate given
that consumers have previously communicated with the FTC. To increase the response rate for
the surveys, FTC staff intends to send follow-up notices to remind the consumers to complete
and return the surveys.
(4)

Testing Procedures of Methods Undertaken

Before conducting the full mail survey, the survey instrument will be pretested by
interviewing 30 identity theft victims. The survey will then be modified to correct any problems
discovered through this procedure. See Part A. 12 above.
(5)

Individuals Consulted on Statistical Aspect of the Focus Groups and Survey

The topics for the focus group interviews and the mail survey have been developed and
reviewed internally by various FTC staff, including staff attorneys within the Division of Privacy
and Identity Protection,7 and with the FTC’s survey consultant, Manoj Hastak, PhD., Associate
Professor of Marketing at American University’s Kogod College of Business Administration in
Washington, DC. Keith Anderson, Senior Economist, Bureau of Economics (202/326-3428),
also assisted with the sampling methodology. The contractor, Macro International, is
responsible for conducting the focus group interviews. Macro has extensive experience
conducting focus group interviews that are statistically rigorous.

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David Lincicum, Pavneet Singh, and Anthony Rodriguez (202/326-2252).

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