Worcester Telegram & Gazette
By Eric Bourassa and Gail Hillebrand
With the recent reports
that a fraud ring gained access to the personal and financial information of
an estimated 500,000 consumers from computer databases maintained by ChoicePoint
Inc., the need for tougher safeguards against identity theft has never been
so clear. Fortunately, help may be on the way for consumers in Massachusetts.
ChoicePoint is an Atlanta-based
company that compiles a vast database of information on millions of Americans
drawn from court records and other public documents. It is an information giant
whose customers include most Fortune 500 corporations, local, state and federal
law enforcement, and every major federal government agency. The company says
it has 19 billion records that are routinely delivered in reports and analyzed
for an array of reasons, including marketing, fraud detection, background checks,
police investigations and journalism. Chances are the company maintains a record
on you.
Many of ChoicePoint's files
on American consumers contain such sensitive information as Social Security
numbers linked to names and addresses. That's exactly the kind of information
that crooks use to commit identity theft. Because U.S. retailers are anxious
to capitalize on the American consumers' desire to buy, they waste no time throwing
credit at anyone browsing high-ticket items in their stores. And imposters take
advantage of this, getting their hands on valuable plastic with as little as
a Social Security number and a name. Already, the Los Angeles County Sheriff's
Department has found that suspects have tried to redirect the mail of at least
750 people, usually a first step in identity theft.
Identity theft is the fastest
growing form of financial fraud in the United States and ruins the credit of
millions of Americans every year. According to a report by the Federal Trade
Commission in 2003, nearly 10 million Americans are victimized by identity theft
every year.
If you become a victim of
identity theft and have new accounts opened in your name, you'll spend, on average,
$1,495 and 600 hours clearing up the mess. In the meantime, you'll probably
have a tougher time getting a car loan, home mortgage or credit card because
of damage to your credit record. These days, a damaged credit record can even
prevent you from getting a job or apartment.
News reports about the ChoicePoint
fraud ring began to surface after the company notified an estimated 35,000 consumers
in California that the security of their personal and financial information
had been compromised. ChoicePoint notified Californians about the security breach
because state law there requires them to do so. However, no other state requires
such notification.
After news about the ChoicePoint
scandal became public, the company announced that it would notify consumers
in states outside of California. About 1,100 Massachusetts consumers will be
receiving a letter from ChoicePoint. But it shouldn't be left up to a company
that has had its security breached to decide which consumers to notify when
sensitive information has been compromised. All consumers deserve the right
to be notified in these cases.
Massachusetts lawmakers
have a chance to give you that right by passing an identity theft protection
bill introduced by state Sen. Jarrett T. Barrios, D-Cambridge, and state Rep.
Michael A. Costello, D-Newburyport. The measure requires companies to better
safeguard consumers' information and to inform people when their personal information
has been compromised by a breach in security. The bill also gives consumers
the right to put a security freeze on their credit file at any time and limits
the use of Social Security numbers as identifiers.
A security freeze lets the
consumer prevent anyone from looking at his or her own credit reporting file
unless the consumer allows it. When an imposter seeks credit in the consumer's
name, the creditor checks the credit reporting file. If the file is frozen,
the creditor will deny the thief's credit application. When the consumer is
applying for credit, the consumer can lift the freeze so that a particular creditor
can see the file or for a specified period of time. When the consumer is not
seeking credit, the security freeze effectively prevents anyone else from getting
credit in the consumer's name.
Four states already have
enacted security freeze laws - California, Louisiana, Texas and Vermont. It's
time for consumers in Massachusetts to have the same right. Consumers need the
right to put a security freeze on their credit files so they can protect their
financial privacy and prevent thieves from stealing their identities.
It may be too late to protect
consumers in Massachusetts whose personal information was stolen due to the
ChoicePoint scandal.
But state lawmakers should
learn from this debacle and pass legislation so companies will be required to
notify consumers when sensitive information has been compromised and they can
protect themselves by locking up their credit file with a security freeze.
Eric Bourassa is a consumer
advocate with MassPIRG in Boston. Gail Hillebrand is a senior consumer lawyer
with the Consumers Union in San Francisco.
