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The Key to Safeguard Your Credit
Identity theft is one of the fastest growing crimes in America. Identity theft is the taking of another's personal information-such as social security number, name or date of birth-for the purpose of assuming the victim's identity to commit fraud. The Federal Trade Commission estimates that identity theft claims nearly 10 million victims annually, costing businesses and consumers $53 billion.
Locally, an increasing number of Massachusetts consumers are also falling victim to identity theft. During the past five years, the number of Massachusetts consumers who have filed identity theft complaints with the Federal Trade Commission has increased by almost 800 percent.
A June 2005 survey of over 500 Massachusetts shoppers conducted by MASSPIRG found that 14 percent were victims of identity theft and 71 percent were concerned about becoming victims.
Consumers have great cause for concern. 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.
These ongoing security breach scandals demonstrate that individual consumers alone cannot fully protect themselves from this crime. Easy access to consumers' confidential identifying information, including social security numbers, has contributed to the identity theft epidemic. Credit card companies, merchants, credit bureaus, and other businesses do not adequately safeguard consumers' personal financial information, making it relatively easy for thieves to steal this data and use it to take out new credit or to rack up charges on existing accounts.
To guard against this harm, 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 their express approval. These 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 or credit score. If a consumer's credit file is frozen and an imposter applies for credit in that consumer's name, a prospective creditor would likely deny the imposter's application because the security freeze would prevent the creditor from checking the consumer credit report or score.
The Massachusetts legislature is considering enacting a similar measure. To gauge consumers' support for legislation enabling individuals to place a security freeze on credit reports, MASSPIRG surveyed 500 shoppers during the month of June 2005. 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.
Your donation supports MASSPIRG's work to stand up for consumers on the issues that matter, especially when powerful interests are blocking progress.