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Press Release August 18, 1997 |
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YONKERS, NY - Identity theft defrauds more than a thousand people a day. It is one of the fastest growing crimes in the nation. All a thief needs in order to steal your credit identity is your name and Social Security number. If you're a victim, you could be falsely labeled a bad credit risk, an income tax evader, and a criminal - and you might not even know about it, according to the September issue of Consumer Reports magazine.
Identity theft is made possible by lenders and credit-reporting agencies that allow the wrong person to use, then ruin a person's good credit reputation. Why don't the credit bureaus do a better job of preventing this expanding crime? Because they work for the lenders - not consumers - and lenders don't pay them to protect consumers. To credit bureaus, your identity is little more than a commodity to be refined and sold in a variety of forms: basic identifying data (Social Security number, date of birth), bill-paying history, and whether you're a creditworthy marketing prospect.
For their part, lenders who make money encouraging debt have no incentive to make getting credit more difficult. Instead, they pass on fraud losses to honest consumers in the form of higher interest rates and fees, and higher retail prices.
The credit industry has the power to stop identity theft. A few commonsense procedures could help combat identity theft - better monitoring for obvious signs of credit fraud, imposing stricter standards for the granting of instant credit, and giving consumers the right to block access to their credit files when they are not in the market for loans. For the most part, though, the credit industry dismisses the issue of identity fraud (which adds up to billions of dollars in losses each year) and has been unwilling to tackle true reform.
Consumer Reports supports Federal legislation prohibiting the sale of Social Security
numbers without the consumers' consent. The magazine thinks this should also apply to other information on credit reports. Legislation should require that credit bureaus monitor their data-bases for telltale signs of fraud, such as drastic changes in a person's payment pattern; mandate that credit bureaus notify consumers in writing whenever anyone looks at their file, or when a change-of address notice is immediately followed by a request for credit information; and give consumers the right to block access to their credit files when they're not in the market for credit.
Currently, frustrated victims are going to court and suing for damages, including economic losses and emotional distress. Credit agencies place the entire burden of straightening out the mess on the shoulders of the consumer - who must hunt down creditors, file police reports, and prepare affidavits. Consumers are considered guilty until they prove their own innocence.
You can take some important but limited steps to protect yourself against identity theft in the first place. It's impossible to close off all sources of personal data about you. But don't make the identity thief's job easier by giving away information about yourself. There are some practical actions you can take to protect yourself from identity theft:
The September issue of Consumer Reports will be available August 26 wherever magazines are sold. For information on subscribing, call 1-800-234-1645. Copies of the full report covered in this release will also be available by fax or mail starting August 26, under code number 9606 via Consumer Reports by Request, 1-800-419-9824, at a cost of $7.75 per report.
