Business Practices & Corporate Accountability News

BOSTON—The Consumer Protection Committee in the state house heard testimony today in support of increased identity theft protections. Speakers included Attorney General Martha Coakley, Office of Consumer Affairs Director Dan Crane, MASSPIRG, and victims of the crime.

“Identity theft is still the fastest growing crime,” said MASSPIRG Consumer Advocate Eric Bourassa. “But many cases could be prevented by passing stronger state laws.”

Since 2000, dozens of states across the country have passed Security Breach Notification requirement and Credit Report Security Freeze laws, both of which are at the heart of legislation before the committee (Senate Bill 161 and House Bill 328) sponsored by state Senator Jarrett Barrios, Representatives William Straus, Michael Costello, and over 60 other legislators.

“No one should ever live in fear of having their lives stolen by identity thieves,” said Senator Barrios. “Keeping people safe from experiencing the tragic crime of identity theft means pushing for harsher punishment of criminals and addressing the root causes of identity theft by empowering consumers to better protect themselves.”

Breach Notification requires any entity that experiences a security breach to notify consumers—to warn them that their information has been lost or stolen in a timely manner. Notification allows consumers to close accounts, closely monitor bills & account statements, and review their credit reports. It also gives entities that collect consumers’ information an incentive to better safeguard that data. Otherwise they will suffer the cost and embarrassment of notifying affected consumers.

Security Freeze allows consumers the ability to block access to their credit report so thieves cannot open new credit accounts and rack up debt in their name. A consumer creates a password with the three major credit reporting agencies that prevents their credit report from being issued for credit granting purposes, without their permission (passcode). No credit report, no new credit account. Therefore, the consumer becomes the gatekeeper of his or her own credit information.

Since 2000, 35 states have passed Breach NotificationSecurity Freeze laws, including all the New England states except Massachusetts. requirements and 26 states have passed

“While many states allow the credit reporting agencies to charge consumers to use the security freeze, Massachusetts should let consumers protect their information for free,” said Bourassa. “The bureaus should pass on any increased cost associated with the security freeze system to their customers: lenders that purchase credit reports like banks, mortgage dealers, retail stores, and auto financers. The average consumers trying to protect themselves should not bare this cost.”

According to MASSPIRG, encouraging consumers to protect their own credit through the security freeze benefits all consumers and businesses because it will reduce one of the most expensive types of identity theft.

Several victims of identity theft testified before the committee.

Sandra Pochapin of Southborough became a victim of identity theft when a pet sitter stole a pre-approved credit card out of her mail, activated it, and racked up thousands in her name. The thief used the credit card to open other accounts at retail stores and to get a cell phone. It took her years to clear up these accounts.

“I spent hours on the phone with credit card companies, constantly on hold,” she said. “No one believes you. These people make you wait forever to get any action. You need a police report, too, but local police aren’t much help.”

Bill Loesch of Dorchester had a tenant who would get home before him and go through his mail. The ID thief opened a credit account in his name using his stolen Social Security number that she found on documents in the mail. She racked up $5,000 in computer store charges and $1,000 in cell phone bills. It took him five years to clear up the mess, and he still fears his credit has been ruined. The crooks also stole his daughter’s information and ruined her credit as well.

“I still have problems,” Loesch said. “I got rid of all my credit cards and I have my mail sent to a drop box now, but I bet if I was looking for a loan I’d be denied.”