Business Practices & Corporate Accountability News

BOSTON—A survey of over 500 Massachusetts shoppers

Since the beginning of 2005, nearly 50 million consumers have had their personal data compromised by several major security breaches involving national companies like ChoicePoint, MasterCard, Citibank, and Bank of America. conducted by the Massachusetts Public Interest Research Group (MASSPIRG) found that 14 percent of consumers had been victims of identity theft and 71 percent were concerned about becoming a victim. In addition, consumers overwhelmingly supported (93%) a "security freeze" to protect them against identity theft.

Since credit card fraud is the number one type of identity theft in Massachusetts, Beacon Hill lawmakers are considering enacting a security freeze measure. To gauge consumers' support for legislation enabling individuals to place a security freeze on their own credit reports, MASSPIRG surveyed 500 shoppers during the month of June at retail locations across Boston. The results of the survey demonstrate overwhelming support by the public for a security freeze law. Specifically:

- 93 percent of respondents support the security freeze law.

- Of those that supported the security freeze law, 89 percent of respondents would still support the law even if it would take up to 48 hours to lift the freeze and get credit approval.

- 86 percent of respondents said they would use a security freeze to restrict access to their credit report if they had the option.

"Our findings show that consumers want the tools necessary to protect themselves from identity theft," said MASSPIRG Consumer Advocate Eric Bourassa. "When asked even if it would take them two days to lift the security freeze and get access to credit--almost 9 out of 10 consumers said they would use the freeze if it were available to them."

Security freeze laws help prevent identity theft because most businesses will not issue new credit or loans to an individual without first reviewing his or her credit report. If a consumer's credit file is "frozen" and an imposter applies for credit in that person's name, a prospective lender would be unable to see the credit report to judge the consumer's creditworthiness and would deny the credit application.

To guard against identity theft, ten states have passed "security freeze" laws that give their residents the right to "lock" their credit files so that new credit accounts could not be opened without the consumer's express approval.

"Not enough has been done to protect the elderly and others from the growing crime of identity theft," said state Senator Jarrett T. Barrios (Cambridge), author of a comprehensive identity theft bill. "We must get tough on the criminals that victimize unsuspecting consumers but we also need to get to the root of the problem. Allowing people to place a security freeze on their financial data is far and away the best way to protect consumers from identity thieves."

The Massachusetts legislature's joint House and Senate Committee on Consumer Protection and Professional Licensure has created a sub-committee, headed by Barrios and state Representative William Straus (Mattapoisett), which will recommend a comprehensive identity theft bill to the full committee.

"It is time for Massachusetts to step up the fight against identity theft," said Representative Straus. "We need to provide consumers with options to protect their financial privacy before they become victims and we need to make sure government agencies and businesses are doing their part and notifying consumers when their security and privacy have been breached."

Senator Barrios and state Representative Michael Costello (Newburyport) filed an omnibus identity theft bill that includes the security freeze (Senate Bill 184). Other lawmakers, including the late state Senator Charles Shannon (Somerville), Attorney General Thomas Reilly, state Representative John Scibak (South Hadley) and Governor Mitt Romney have filed similar legislation.

To date, ten other states--California, Colorado, Connecticut, Illinois, Louisiana, Maine, Nevada, Texas, Vermont, and Washington have passed versions of security freeze legislation. In addition, the New Jersey General Assembly has passed what would be the strongest security freeze law in the country, further making a security freeze easier for all consumers to use. That bill awaits action by the New Jersey Governor, who has publicly supported the bill.

"A security freeze is a commonsense approach to prevent the most common type of identity theft, credit card fraud, by putting consumers in charge of their own credit information," said state Rep Michael Costello. "Massachusetts has long been a leader in protecting consumers, and must act now before Congress preempts states from taking strong action by passing weak federal law."

Identity theft is the fastest growing crime in the nation, with complaints to the Federal Trade Commission increasing by almost 800% in Massachusetts since 2000.