Credit Industry Opposes Anti-ID Theft Method

athloi alerts us to an opinion piece running in USA Today on the backlash against an effective tool to fight identity theft. The big three credit bureaus don't like the numerous state laws that have been passed requiring them to give consumers a simple way to freeze their credit. Watch for a push at the federal level to get a watered-down statute that pre-empts state laws. "Lawmakers across the country — pushed by consumer advocacy groups — ... have passed laws that allow consumers to freeze their credit, a surefire way to prevent thieves from opening new accounts or obtaining a mortgage in a consumer's name. Under a freeze, a consumer cuts off all access to his credit report and score, even his own. All lenders require that information, so no one can borrow money in the consumer's name until he or she lifts the freeze. It's simple, and it works. So, of course, it's under threat from the Consumer Data Industry Association, which represents the Big Three credit bureaus. They make millions gathering and selling consumer data. Freezes cut into that business."

naturally...

[v_1_r_u_5]

since credit cards have absolutely no profit in preventing credit card fraud / id theft (remember, it's the merchants who get screwed), of course they're against this sort of thing.

stolen identity

[donaggie03]

If someone stole your identity, what is to stop them from pretending to be you in order to disable the freeze on your credit?

It's cheaper

[snowgirl]

I heard that it was actually just easier for them to pay off credit card fraud in general, than to prevent it.

Which is why they usually don't do anything to prevent it.

Remember the guy who tore up his credit card entry form like they said to, then taped it back together, put in an old address, and a different phone number, and still got a credit card in his name?

Yeah, the companies know how to prevent all this stuff, just it would cost more money than they lose by just eating the costs.

Freezes cut into their business?

[morgan_greywolf]

How, exactly, do freezes legitimately cut into their business? No one is supposed to be able to get a credit report on you without your explicit authorization anyway. Any credit reports requested on you without your explicit authorization is a violation of federal law.

The bottom line is that the Big Three credit reporting agencies are sleezebags. If they had their way, they'd have it so that anyone can put anything in your credit file they like, and anyone can request any info they like any time. They don't want you to have any control over what's in your credit file, because ultimately that is the source of their power!

Screw this. I'm gonna go live off the grid somewhere.

Debt free is the way to be.

[Shambly]

I would be happy to have a credit freeze on all my accounts. Borrowing money is a horrible system. It works for starting a business or a mortage on a house but all the little scams like car loans and furniture store and such only encourage people to live beyond their means. Paying cash for those kinds of things is so much cheaper. Debt is a form of slavery, your no longer working for money your working so they won't take your things away. It makes it so the credit card company owns you. Sure you can be good with a credit card but they do everything in their power to make you fall in that trap so that they can milk as much money from you as possible.

Re:Credit Freeze = Relief

[Shakrai]

Does anyone really think it is ok to just allow lenders to defame the name and credit history of anyone unlucky enough to have their SSN stolen?

More to the point, our credit heavy soceity has allowed less then honest companies to blackmail consumers that have legitimate business disputes by threatening to sour your credit report. In the old days if you had an honest dispute with a company and refused to pay them they could sue you and both sides would get their day in court. Now they can just insert an item into your credit file, wait until you are denied employment/that mortgage/security clearance/etc/etc and know that you will pay up because they basically have you by the balls.

No due process of law and the burden of proof is on the consumer to prove that the derogatory information is false -- not on the company to prove that it's true.

Expect the Usual

[Nom du Keyboard]

Expect these big three troublemakers to lobby for a weaker federal law that preempts all state regulation in the process. After all, that's the American way these days.

And this surprises anybody?

[WIAKywbfatw]

If you can't get additional credit then you can't get yourself further into debt, which means that credit lenders and credit checking agencies can't make more money out of you for the duration of the freeze.

Helping people get more into debt is what these guys do. Why would they be remotely in favour of a measure that (along with helping to reduce the likelyhood of credit-related fraud) would allow you to stop yourself from spending money that you don't have and thus digging yourself further into the hole that they want you to live your life in.

Remember, when these guys say credit they mean debt.

B-b-b-but...

[Red Flayer]

I thought information wants to be free?

Oh, not personal information, you say? Just the ones and zeroes that we want access to, not the ones and zeroes that they want access to?

The information age is a double-edged sword. Just as we can make better purchasing decisions based on easily aggregated information, companies can make better lending/purchasing decisions based on easily aggregated information. Is there a correlation between credit scores and suitabilty as borrowers or tenants? Sure. Why should we fault the companies that operate more efficiently because they take that into consideration? And FWIW, your credit history (aside from bankruptcies) can be rebuilt in less than seven years.

And no, it's not impossible to live without credit, you just need to make some sacrifices. It's a question of how much you value the privacy of information you choose to make public.

Re:How about using the Federal law

[Skreems]

Bullshit. The states should be more powerful than they are. There's nothing worse than a federal government dictating one-size-fits-all laws that don't really work for 49% of the population.

Re:Credit Freeze = Relief

[erroneus]

The good news is that I'm in one of those states. The bad news is that there are fees involved. I don't care if the fee is even $1. These credit people have fashioned an industry for themselves based on the [abuse of the] social security number and my personal information. They make a LOT of money from my information and while some laws move to help balance the situation, the benefit is still all theirs. They shouldn't require that I pay them ANYTHING to access, sell or otherwise make my information available to anyone.

That said, I plan to get my credit locked up anyway. Not that I'm at risk for anything at the moment... I'm not rich, my credit's not great and after I paid off my last car, I don't deal much in debt financing any longer. After going mostly cash-only, I find myself rather free and I've got more money in the bank than I've ever had. (I think between a savings account and a credit account, I think most people will agree which is more better in the long run.) Perhaps I'll stop getting all those damned credit card offers in the mail as well!

Re:Credit Freeze = Relief

[Anon-Admin]

Denied employment and security clearance are not a big issue. They do not check your score and decline you. They check for patterns of abuse that would appear to be fraudulent but legal within the system. For example, Max out credit, divorce giving credit bills to the husband, husband files bankruptcy, wife (with clean credit) starts getting cards, couple gets remarried, works on wife's credit, once the 7 years are up they go back to square 1. Another they look for is pyramiding of credit cards.

The truth, although most don't see it, is that the credit report is just bits in a computer. It DOES NOT MATTER! Everyone is so worried about it and in reality it is only good if you want to get short term high interest credit (Credit Card). Want to buy a house, put 20% down and they WILL NOT DENY YOU A LOAN! Sure it takes time to save that amount, but it is worth it!

I personaly think that the credit reporting system should be outlawed, but we all know that will never happen.

Re:Credit Freeze = Relief

[MontyApollo]

It is interesting that in a few of the states listed, only identity theft victims (with a police report) can get this.

Re:Useless Freeze?

[Qzukk]

require a PIN for any transaction that was sensitive or that was over x dollars?

But then how would the credit agency make their money off of fraudsters?! If they couldn't collect their $x every time an identity thief opens an account that requires a credit check, they'd go broke!

Re:Credit Freeze = Relief

[Anonymous Coward]

A poor credit rating also disqualifies the target from offers and promotions, which come around on a statistically regular basis, which assist other citizens in getting ahead. A poor credit rating also figures in to insurance premiums and starting salary. Indeed, when one takes a good close look at it, it appears that major corporations will saddle a new employee, with poor credit, with a lower starting salary regardless of their qualifications or abilities and thereby make it, again statistically, more likely that the employee will fall further into delinquincy because it makes the employee more dependent upon the employer and, psychologically speaking, less apt to raise questions over poor leadership, direction, or abusive managerial tactics.

2.3 million opponents to weakening the law

[linuxwrangler]

I bet these 2.3 million people [sfgate.com] don't want the law weakened.

Re:Credit Freeze = Relief

[Foobar of Borg]

It is interesting that in a few of the states listed, only identity theft victims (with a police report) can get this.

What's scary is that, in the states not listed, you can't get a credit freeze even if you *are* the victim of identity theft with a police report!

Re:Credit Reporters

[Renraku]

Then I suggest you start looking into lawsuit options.

There's no escape from the credit system, you should be entitled to quite a big payout, and I think it needs to happen.

Re:Useless Freeze?

['nother poster]

That is the whole idea. The ID theif can't open new/big credit in your name without removing the freeze with the pin which is seperate from your other indetifiable data, and in most circumstances the freeze is only lifted temporarily. That way you can continue to use your existing lines of credit without any undue annoyance at using a pin all the time while requiring it for new credit for large purchaces.

Re:Credit Freeze = Relief

[lgw]

Live responsibly within your means and these are not critical problems. Live a lifestyle that is only sustainable through borrowed money and just about everything is a crisis. It doesn't take vast riches to live without borrowing money, it just takes an attitude adjustment, and the earlier you make it the easier it is.

Make the accumulation of wealth a priority and abandon status symbols entirely and it won't take too many years before credit doesn't matter much. Worked for me, and I was sadly in

Not to disagree of course with the original point that the burden of proof of identity belongs with the lender.

Re:Credit Freeze = Relief

[lgw]

Google around for the opt-out. There is certainly a real one, and it may even be the one the poster linked. I did this online and all pre-approved offers stopped within a couple of months.

Re:How about using the Federal law

[HomelessInLaJolla]

This is where your mental illness, or supreme inadequacy, is showing. Theory would be that international bankers are all philanthropic saints who are in business for the greater good of all humanity.

FACT would be that international bankers exist, they have held their businesses within their close circle of family and friends for centuries, and that they are shrewd businessmen who, through living in private communities with private security forces, have distanced themselves from the social problems created by their deliberate and cutthroat pursuit of profit margins.

But don't let the facts interrupt your rants and steady stream of daily hate which you direct towards me.

Re:Credit Freeze = Relief

[Shakrai]

Live responsibly within your means and these are not critical problems

You can live entirely within your means, never using (or using and paying in full) a credit card for anything and still wind up with a shitty credit score/report. All it takes is one major illness while having crappy or no medical insurance. Medical problems are the leading cause of bankruptcy in the United States. Other things (natural disasters, unemployment, divorce, bad investments, etc, etc) can also cause your financial situation to become untenable without ever trying to live beyond your means.

And while it's illegal for an employer to fire you because of a past bankruptcy, it's not illegal for them to fire you based upon derogatory information (i.e: missed payments) on your credit report. Nice catch-22 there, isn't it? Name one person that has filed bankruptcy who doesn't have other derogatory information on their credit report....

Make the accumulation of wealth a priority and abandon status symbols entirely and it won't take too many years before credit doesn't matter much

That's good advice for anybody. But it's a myth that most people are driven to financial ruin by trying to live beyond their means.

Re:Credit Freeze = Relief

[Anon-Admin]

Wow, I did not know I was on easy street!

Here is the problem with your argument; I have ALWAYS lived in my means! From the first job to my current job. When I was making $3.35 an hour and working 80 hours a week to now. If you live in your means you do not need credit. I did not say it was easy. You will have to make sacrifices and give up some stuff, but in the long run you will be better for it.

The first thing is to get a place to live that costs no more that 1/4 your wage! Can't afford an apartment by your self, get a room mate! Cut out the extras, going to the movies, eating out, beer, etc. Make a budget and stick with it!

Here is a good piece of advice, buy an older used car and pay cash for it. Then take $100 or $200 a month that you would spend on a car payment and put it in a savings account. In 2 to 3 years when the car dies you'll have $2400 to $3600 to buy another used car. Around here that will get you a car that is in GREAT shape. Now you are not paying the interest for the loan, the bank is paying you interest while you save the money for a car!

Am I on easy street? You tell me, For the last several years I have made $39,000 a year and managed to provide for a family of 4! House, cars (2), food, etc. I am the only provider, my wife does not work outside the home (meaning she tends to the house and does not add to the income) I have done all this with out living out side my means and with out gaining any real debt. I have a CC that I put $1000 on and did not pay. This is the only outstanding debt and was because the credit reporting agencies would not lock by account and the company I worked for put my info on the public internet. Make the report look bad and I am not a target for ID theft.
You just need to learn to manage money and be froogle with what you have.

I still have money to spend, invest, or do what I want with. If I am on easy street it is only because I worked my A** of getting here!

Re:Credit Freeze = Relief

[HomelessInLaJolla]

Or when you simply lack the money to spend on what you need.

That's the concept that escapes the self-superior Slashdot financial trolls (who are probably employed in the collections business anyway) because, in their view, "what you need" should be reduced to bread and water living in a doorway if necessary. Don't bother to ask them how that would look to an employer.

It's still quite obvious to me, and perpetually sidestepped or outright derided by them as "conspiracy theory", that those institutions which create debt in this nation, statistically, are working to ensure that more and more of the population remains in debt. They can do this easily because the same people who manage the banks also manage the oil companies, and sit at the heads of the major employers, and the insurance companies, and the lobbyists who influence the politicians... But to point any of that out would, again, be derided as "conspiracy theory" because, for those self-superior Slashdot financial trolls, reality is just too difficult to face.

There hasn't been one single year since WW-II, and probably since the Civil War, and maybe even earlier, when federal debt didn't increase and, in lockstep, total taxes rise with them. That's never to be noticed, though, when the trolls are having a circle jerk posting "just live within your means!"