Identity Theft: A Solution?

Identity theft victimizes 10 million people a year. When you find out that your Social Security number and credit card numbers have been stolen, your first reaction is probably a dumbfounded, numb feeling of “oh God, what do I do now?” Other than keeping a close eye on your credit report, there hasn’t been much else you could do. Until now. (Maybe.)

Some state legislators are considering the idea of putting a security freeze on the credit reports of identity theft victims. California citizens already have the right to put a security freeze on their credit reports, and now 20 state legislatures are considering this idea.

If you choose to freeze your credit report, nobody can access the information or obtain a new credit card or take out a loan on this account. It’s locked down. As a consumer attorney puts it, “this puts the consumer in the driver's seat over their personal information.”

As you’ve probably guessed, the retail and credit industries are less than enthusiastic about this idea. So far this proposal has been derailed in Utah and Indiana by armies of lobbyists. But the movement is gaining momentum in other states. We’ll see…

While most people are terrified at the prospect of identity theft, some companies are drooling over the marketing opportunities presented by this tragedy.

Equifax, one of the largest credit bureaus, is selling a $100-a-year package to consumers called Credit Watch, which lets consumers know if there’s “unusual activity” going on in their credit reports. Equifax sent an e-mail to all its Internet affiliates, urging them to take full advantage of the hysteria over identity theft.

The Identity Theft Resource Center has described this as “profiteering at its worst.”

So, we have two possible solutions to identity theft: 1) You’re in the driver’s seat, able to lock down your account and prevent anyone from accessing your information or obtaining a loan or credit card; the credit industry doesn’t like this idea. 2) Credit bureaus can sell you a useless gimmick to make you feel like your credit information is “safer.”

Hmmm…Which of these approaches do you think will be chosen by our coin-operated legislators? Anybody want to guess?