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PIRG Identity Theft II: EXECUTIVE SUMMARY
One year ago the PIRGs released our first national report on the skyrocketing consumer problem of identity theft, "Identity Theft: The Consumer X-Files." It was the fourth report, however, in our series on credit report problems. In the last year, much attention has been focused on identity theft, but the number of consumers suffering the nightmare of identity theft continues to grow. In many ways, the problems those victims face today have grown worse. Meanwhile the credit industry continues to block any meaningful efforts to pass stronger consumer privacy protection laws in the states and in Congress.
This report updates the 1996 report and also describes important new amendments to the federal Fair Credit Reporting Act (FCRA) that take effect on 30 September 1997. PIRGs and other consumer groups fought for these changes, which give consumers some tools to protect the accuracy of their personal information, but do not go far enough to help identity theft victims. Unfortunately, the data dealers, especially the banks, extracted several concessions in return for the improvements. Meanwhile, however, consumers won 1997 victories in Colorado, New Jersey and California.
Section I describes how identity theft has worsened while access to personal information has been made easier, gives information about lesser known consumer "blacklists" that identity theft victims should be aware of, and highlights how the credit industry has blocked efforts in California to provide consumers with even greater privacy protections. Section II is an overview of the new federal Fair Credit Reporting Act (FCRA) Amendments--the good, the bad, and the ugly. Section III outlines PIRG's Platform to protect consumers from identity theft and other privacy invasions. It includes a detailed set of proposals for state and federal legislatures to take action to stop identity theft, including greater privacy protections in credit issuing and credit reporting laws.
Finally, the report describes how consumers can wrest control of their personal information from the data dealers. Following publication of the 1996 report, CALPIRG helped victims form a self-help organization, "Victims of Identity Theft." They have begun to fight back together. This report tells their stories.
While identity theft problems grow worse, efforts to improve documentation of the number of cases are slow. Access to personal information compiled in private and government databases continues to become easier through the internet and other online systems. The credit industry has offered few meaningful solutions to the problem of identity theft and has used its political muscle to block reform efforts.
1) provide all consumers with one free credit report annually upon request;
2)give all consumers the right to block access to their credit report to anyone who does not have the consumer's express authorization;
3) require matching of at least 4 points of correspondence, such as exact name and exact address, between reports and credit applications;
4) improve address verification by creditors and credit bureaus; and,
5) close the so-called "credit header" loophole.
The new federal Fair Credit Reporting Act amendments give most consumers important new tools to improve the accuracy of their credit reports and somewhat protect their credit from damage by identity thieves, but further reform is needed. PIRGs will continue to work with other consumer and privacy advocacy organizations to fight for the reforms we outline in full detail in the last section of this report. No one should have to suffer the nightmares the identity theft victims--whose stories are described below--have endured.