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Credit Industry Opposes Anti-ID Theft Method

Posted by kdawson on from the frozen-out dept.

athloi alerts us to an opinion piece running in USA Today on the backlash against an effective tool to fight identity theft. The big three credit bureaus don't like the numerous state laws that have been passed requiring them to give consumers a simple way to freeze their credit. Watch for a push at the federal level to get a watered-down statute that pre-empts state laws. "Lawmakers across the country — pushed by consumer advocacy groups — ... have passed laws that allow consumers to freeze their credit, a surefire way to prevent thieves from opening new accounts or obtaining a mortgage in a consumer's name. Under a freeze, a consumer cuts off all access to his credit report and score, even his own. All lenders require that information, so no one can borrow money in the consumer's name until he or she lifts the freeze. It's simple, and it works. So, of course, it's under threat from the Consumer Data Industry Association, which represents the Big Three credit bureaus. They make millions gathering and selling consumer data. Freezes cut into that business."

6 of 434 comments (clear)

  1. Credit Freeze = Relief by Applekid · · Score: 5, Informative

    Another happy side-effect of freezing your credit: No snail-mail spam about preapproved credit offers. It's saved me much over the last year in time devoted to shredding.

    --
    More Twoson than Cupertino
    1. Re:Credit Freeze = Relief by j.sanchez1 · · Score: 5, Informative

      According to this, the following states have this Credit Freeze option open to their residents. Use it while you can.

      Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Indiana, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, New York, Oklahoma, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, Wyoming

      It also lists fees and such.

      --
      Speedy thing goes in; speedy thing comes out.
    2. Re:Credit Freeze = Relief by Anonymous Coward · · Score: 5, Interesting

      I still don't understand why this is even necessary.

      How about this: Any lender that opens a line of credit must PROVE that the person they say they opened it for actually opened it.

      That doesn't mean you can just say, "Well, I have this social security number, date of birth, and a name - that's enough right?"

      I'm talking "You want credit? Let me get you to fill out this application and have it notarized. Otherwise, no credit for you."

      Anyone lender who can't PROVE they have the persons permission CAN NOT LEGALLY post any negative credit information anywhere and can not try to collect on any debts supposedly owed.

      Does anyone really think it is ok to just allow lenders to defame the name and credit history of anyone unlucky enough to have their SSN stolen?

      The blame for stolen identities falls SQUARELY in the hands of those who allow those stolen identities to be used.

    3. Re:Credit Freeze = Relief by Shakrai · · Score: 5, Insightful

      Does anyone really think it is ok to just allow lenders to defame the name and credit history of anyone unlucky enough to have their SSN stolen?

      More to the point, our credit heavy soceity has allowed less then honest companies to blackmail consumers that have legitimate business disputes by threatening to sour your credit report. In the old days if you had an honest dispute with a company and refused to pay them they could sue you and both sides would get their day in court. Now they can just insert an item into your credit file, wait until you are denied employment/that mortgage/security clearance/etc/etc and know that you will pay up because they basically have you by the balls.

      No due process of law and the burden of proof is on the consumer to prove that the derogatory information is false -- not on the company to prove that it's true.

      --
      I want peace on earth and goodwill toward man.
      We are the United States Government! We don't do that sort of thing.
  2. Debt free is the way to be. by Shambly · · Score: 5, Insightful

    I would be happy to have a credit freeze on all my accounts. Borrowing money is a horrible system. It works for starting a business or a mortage on a house but all the little scams like car loans and furniture store and such only encourage people to live beyond their means. Paying cash for those kinds of things is so much cheaper. Debt is a form of slavery, your no longer working for money your working so they won't take your things away. It makes it so the credit card company owns you. Sure you can be good with a credit card but they do everything in their power to make you fall in that trap so that they can milk as much money from you as possible.

  3. Useless Freeze? by Knave75 · · Score: 5, Interesting

    Perhaps I am misunderstanding the situation, but I have a question. Presumably, the idea behind the credit freeze is to stop those who have stolen your identity from doing naughty things with it. However, if the would-be thief has the wherewithal to abscond with thousands of dollars under your name, would this same thief not also have the ability to remove the freeze?

    Thief: I would like to borrow $100,000 from Knave's account please.
    Clueless Customer Rep: Sorry sir, Knave has put a freeze on the account.
    Thief: I see...

    (4 minutes later, with a different clueless customer rep)

    Thief: Knave here, I would like to remove the freeze on my account, I'm buying myself a sweet car.
    Clueless Customer Rep: Very good sir, freeze ovah.
    Thief: Thanks!

    What am I missing?