Identity Theft Protection

Each week we hear of a new loss of personal data that threatens thousands of Americans with identity theft. In this age of electronic banking and internet transactions, it is easier than ever to have your personal data stolen. Almost every state, including New York, has responded to this threat by enacting laws that allow individuals to protect themselves from identity theft by controlling access to their credit report and the personal data it contains.   Congresswoman Maloney is working in Congress to expand this “file freeze” protection at the national level and enhance notification requirements when personal data is lost. By now, many victims have found out the hard way that once a criminal sets up false accounts in your name, it can be very difficult to clear your credit. In this case it may be years before you can buy a car, buy a house, or get a credit card.

File freeze should be available to everyone because it is the most effective tool to combat identity theft. A credit report freeze works because it actually stops the granting of new credit without the consumer’s express permission and thus prevents identity theft. In contrast, a fraud alert, the solution supported by the credit rating industry, only conditions the granting of credit and can easily be evaded by a criminal who has stolen the victim’s Social Security number and birthdate. That’s why many states have now adopted universal file freeze.

Congresswoman Maloney’s federal file freeze bill does not affect the use of credit cards or existing credit lines. It only prevents the issuance of new credit unless the individual requests the credit report be sent to the lender. This gives individuals control over their credit report and allows them to protect themselves. Any federal file freeze must be easy to use, convenient, and low cost, all of which are requirements in Congresswoman Maloney’s bill. Her bill also sets a federal floor, but allows states to provide faster and cheaper file freeze as technology permits.

Although some question whether it will be too hard for individuals to unfreeze their reports, homebuyers and car buyers are still getting loans in California and other states that have had file freeze for some time. The experience of these states gives the Congresswoman confidence that technology can solve this problem. A national standard giving all individuals the ability to control access to their credit reports would create the market conditions for the development of new security systems which make the process of freezing and unfreezing even easier. Just as secure payment systems like PayPal sprung up when eBay burst on the scene, so will secure systems of freezing and unfreezing spring up if file freeze becomes a national phenomenon.

Congresswoman Maloney will continue to fight for universal file freeze when the next data security bill comes to the Floor to protect the rights of New Yorkers and the rights of states to protect their citizens from identity theft. Otherwise, New Yorkers could wake up one morning to find their rights gone.

More on Identity Theft Protection

Oct 31, 2007 Press Release

WASHINGTON – Starting November 1, the three major credit monitoring bureaus - Equifax, Experian, and TransUnion – will begin offering consumers in all 50 states the option of freezing their credit reports and preventing identity thieves from opening accounts in their name.  Congresswoman Carolyn B. Maloney (D-NY), Chair of the Financial Institutions and Consumer Credit Subcommittee and author of federal legislation that would create a national “file freeze” standard, applauded the Bureaus (see links to letters below) and urged them to take additional steps to make their file freeze services more affordable, faster, and easier-to-use. 

Aug 2, 2007 Press Release

Washington, DC – Today, the Chair and Ranking Member of the Subcommittee on Financial Institutions and Consumer Credit, Congresswoman Carolyn B. Maloney (D-NY), and Congressman Paul Gillmor (R-OH), introduced bipartisan legislation (H.R. 3316) that would allow consumers to freeze their credit reports and prevent identity thieves from opening new lines of credit in their name.