The fight against identity theft

“I was mugged once, years ago,” one of our editorial researchers told me. “It was bad, but at least that guy had the guts to look me in the eye.” This time, she’d gotten a call from her bank alerting her that someone in Oregon had just withdrawn $2,000 from her account. Since she and her husband were both at home in New York, that was very bad news.

Like many of the estimated 10 million people a year whose lives and accounts are invaded by identity thieves, our staffer had been as cautious as she could be and still be part of today’s marketplace. But either her financial records were leaked or a hacker typed his or her way through the barriers protecting her account.

In either case, companies who hold sensitive personal and financial information about us, and the lawmakers who should be overseeing them, are failing to build stronger protections against the increasingly prevalent crime of ID theft. Lawmakers and regulators must work fast. Here are three things that Consumers Union, the publisher of Consumer Reports, is pushing them to do:

• Oversee information brokers, companies that collect and sell people’s personal and financial data. Federal law should require them to safeguard those data, sell data only to carefully screened clients, tell consumers what’s in their files, and correct mistakes promptly, since mistakes can lose you a job, a mortgage, or an insurance policy.

• Pass strong federal and state laws that require companies to notify the
consumers whose personal and financial information they hold when their privacy is compromised. Now, only California residents have that protection.

• Pass laws in every state allowing consumers to “freeze” their credit-bureau files. With a security freeze in place, your credit report and score can’t be given to potential new creditors unless you choose to “unlock” the file when you apply for, say, a car loan. Most businesses won’t issue new credit or loans without first checking credit records. This way, thieves will hit a brick wall trying to open an account in your name.

There’s no single solution to shielding consumers from the fast-changing schemes of ID thieves, so Congress should preserve the right of states to
continue developing ever more sophisticated guards. For more about what CU is doing, and for what you can do to protect yourself, go to our Web sites www.consumersunion.org/privacy and www.consumersunion.org/money.

Jim Guest President

The board of directors and staff of Consumers Union mourn the passing of Elizabeth Crow, a brilliant and inspiring colleague who was editorial director and vice president for the past 13 months. After serving in leadership positions at many of the world’s top commercial publishers, she came to us with a passion for our mission as an expert, independent, nonprofit voice for consumers. She will be sorely missed, but her influence will continue.