Overview
Just since February 2005, Choicepoint, Bank of America, DSW Shoe
Warehouse, Cardsystems, Department of Veterans Affairs, and other
companies and agencies have disclosed that they’ve lost the
confidential financial information of over 90 million Americans. We
learned about these security breaches only due to a pioneering
CALPIRG-led California notice breach law that companies complied with
nationwide, while other states began to pass their own laws.
Easy availability of confidential financial information, coupled with
sloppy credit-granting practices by creditors and credit bureaus, makes
it easy for identity thieves to open accounts in our name.
Security freezes give consumers real control over access to their
credit reports. A freeze prevents access to one's credit report to new
creditors. This closes the loophole that identity thieves have
exploited, since most businesses will not issue new credit or loans to
people without first reviewing their credit reports. California enacted
the first freeze law in 2001, and 24 states have followed with their
own laws.
Unfortunately, the banks and credit card companies are pressuring
Congress to override the strongest security freeze and breach notice
laws, as well as dozens of other state identity theft reforms, with a
weak federal law that won’t stop identity theft and won’t allow the
states to innovate.
If the banks and credit card companies had it their way, only previous
identity theft victims would be able to use security freezes. That’s
like saying only victims of car crashes could wear seat belts. They've
even lobbied Congress to allow companies that lose confidential
information to decide whether or not it's important to tell the
consumers who are affected.
