NCPA - National Center for Policy Analysis

Credit Agencies Contribute to Identity Theft

September 12, 2003

The U.S. House of Representatives on Wednesday voted overwhelmingly to reauthorize the Fair Credit Reporting Act, and along with the legislation to institute uniform credit-reporting requirements nationwide, lawmakers added what they called some of the toughest anti-identity theft legislation to come out of Congress.

Under the new bill:

  • Americans would gain access to free credit reports and the ability to thwart identity thieves with a single phone call.
  • But the bill also means people would lose the protection of some state financial-privacy laws, which would be pre-empted by federal law.
  • Companies locked in a competitive struggle for customers don't take enough care to match personal data such as Social Security numbers and dates of birth.
  • Even dogs and babies have been offered credit cards; and several studies show files from the three major credit-reporting businesses can be riddled with mistakes that go uncorrected even after victims provide proof of fraud.

While companies are quick to sell data to other businesses, they are loath to report every fraud to the police for fear of bad publicity, according to consumer advocates such as the U.S. Public Interest Research Group.

Source: Associated Press, "Credit-Protection Measure Gains Approval by House," Wall Street Journal, September 12, 2003; Editorial, "Identity thieves feed on credit firms' lax practices," USA Today, September 12, 2003; Synovate, "Federal Trade Commission - Identity Theft Survey," Federal Trade Commission, September 2003.

For USA Today text

http://www.usatoday.com/news/opinion/editorials/2003-09-11-our-view_x.htm

For survey text

http://www.ftc.gov/os/2003/09/synovatereport.pdf

 

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