"Powerful" New Weapon to Battle Identity Theft Is A Dud
Columnist Sandra Block informed us in November, 2004 that "starting Wednesday, consumers will have a new line of defense against identity thieves," when federal law enacted a year ago finally kicks into action. The new law allows consumers in 13 states to order free credit reports from all three credit bureaus, so they may monitor their credit reports for suspicious activity. Citizens of the other 37 states must wait until September, 2005 to get the free reports. Meanwhile, citizens of all 50 states still must pay $4-$8 each to learn their credit scores, however, because the new law applies only to credit reports. Ms. Block hailed this legislation as being a powerful weapon for consumers: "Monitoring your credit report is one of the most effective ways to protect yourself against identity theft, an insidious crime that often goes undetected until victims start receiving calls from collection agencies about fraudulent accounts."
You may order your credit report by visiting a Federal Trade Commission website, http://www.annualcreditreport.com/, by calling a toll-free number (877) 322-8228, or by writing to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. When requesting your report, you must provide your name, address, Social Security Number, date of birth, and possibly more "specific identifying information" to the credit bureaus to receive your credit report. Exactly what this "specific identifying information" is wasn't made terribly clear in Ms. Block's article, which reads more like a press release from Capitol Hill than a thoughtful and well-researched act of serious journalism.
Ms. Block--a money columnist for USA Today, of all things--completely missed the insignificance of this new federal law, and failed to mention those facts that are most relevant to American consumers. Once again, it is up to unpaid volunteers to dig deeper than shallow mass media journalism, to find the real story. So allow me to explain what this "powerful" new federal law really means:
First and foremost, this legislation "defends" against identity theft in exactly the same manner that a coroner "defends" against murder. By definition, you are searching for illegal activity that has already occurred when you monitor your credit report. Simply reviewing your credit report will not prevent a single thief from stealing your identity. At best, monitoring your report may allow you to catch a thief early, and begin the long, costly, tedious process of attempting to clean up the mess they made that much earlier, with no guarantee of success. But only the stupidest criminals continue to use a person's identity indefinitely. It is far safer for them to ruin your credit quickly, and move on to another victim, than to keep pretending to be the same person, especially when they know you will figure it out one way or another soon enough. Ms. Block's description of identity theft helps to perpetuate the myth that "identity theft" involves literally stealing another person's identity, as if plastic surgery and sleeping with your spouse were involved. The truth is, they are not stealing your identity, they are stealing your money, as quickly and quietly as possible.
Second, inmates in the American Debtors Prison have only one conceivable hope for ever getting out of debt: flying low under the radar and preventing the personal information brokers from tracking their every move and interfering with honest attempts to earn an income with which to pay their debts. In order to receive the free credit reports, debtors prisoners must provide a relative wealth of current, accurate information--including current address and the aforementioned "specific identifying information". Does this refer to current income perchance? Since most credit reports contain inaccurate information--not because of identity thieves, but because of credit bureau negligence--how can any personal information unquestionably identify an inquiring consumer better than their name and social security number? It seems the credit bureaus have found yet another way to extort current, accurate information from debtors prisoners which can and will be used against them outside a court of law: provide them this information "voluntarily", or they will refuse to send you your credit report, and you will risk having your identity stolen on top of all the other financial problems you already have.
Third, what kind of legislation designed to "protect" the American People from an urgent threat waits a year before going into effect, and then goes into effect in stages over the course of nearly one more year? It turns out that our Great Protector, the U.S. Congress, has done the credit bureaus a great favor by preventing tens of millions of consumers from demanding their free credit reports at once, which would require the credit bureaus to spend more money on creating new jobs, training, etc., than they will eventually earn by selling all the new personal information they are gathering in this consumer advocacy farce.
Fourth, it has been well-established for years that most consumer credit reports contain errors, including errors that can result in denial of credit, rental housing, employment, etc. The credit bureaus have never exhibited a sincere interest in gathering accurate information, because negative information implies that they are doing a better job of researching consumers than their competitors. Credit bureaus like negative information about consumers, and they are notorious for resisting all attempts to remove inaccurate information--even when required to do so by federal law. The only thing this new federal law does is make credit reports free (eventually). It doesn't compel the credit bureaus to finally comply with the Fair Credit Reporting Act or any other prior legislation designed to ensure that the credit bureaus only traffic in accurate information. Obtaining your own credit report should be free. Why do we need a slow-moving federal law to force them to be free, unless the credit bureaus have some kind of vested interest in preventing consumers from correcting errors in their credit reports?
Fifth, as mentioned in Ms. Block's article, consumers will still have to pay $4-$8 to learn their credit scores. If we assume that just one third of all Americans are adults, then somewhere around 100 million people must pay $4-$8 apiece to learn their credit scores. That translates to anywhere from $400 million to $800 million in annual revenue for credit bureaus, if every American adult sought to learn their credit scores, like the financial "experts" recommend.
Sixth, in his own article on the subject, Sam Hananel of the Associated Press writes that the Federal Trade Commission warns consumers to "beware of scammers who might send e-mails pretending to offer a free credit report as a way to elicit personal information." Translation: this new federal law may actually create more identity theft by helping scam artists who phish for "specific identifying information" by email, since millions of concerned and confused consumers have now been led to believe they have a powerful new weapon against identity theft.
The American Debtors Prison website (http://www.americandebtorsprison.com/) exists in part to explain the fine print of bogus "pro-consumer" legislation like this, which in fact is nothing more than a public-relations mirage that has been carefully crafted behind closed doors to ensure that the credit bureas will profit regardless. Shame on USA Today and other mainstream media for failing to investigate the stories they publish, and merely refashioning government press releases to make it sound like the U.S. Congress is truly protecting consumers. Congress should have forced the credit bureaus to prevent identity theft, since they are the ones who profit from invading consumer's privacy in the first place, just like identity thieves do....
All the best,
Paul
You may order your credit report by visiting a Federal Trade Commission website, http://www.annualcreditreport.com/, by calling a toll-free number (877) 322-8228, or by writing to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. When requesting your report, you must provide your name, address, Social Security Number, date of birth, and possibly more "specific identifying information" to the credit bureaus to receive your credit report. Exactly what this "specific identifying information" is wasn't made terribly clear in Ms. Block's article, which reads more like a press release from Capitol Hill than a thoughtful and well-researched act of serious journalism.
Ms. Block--a money columnist for USA Today, of all things--completely missed the insignificance of this new federal law, and failed to mention those facts that are most relevant to American consumers. Once again, it is up to unpaid volunteers to dig deeper than shallow mass media journalism, to find the real story. So allow me to explain what this "powerful" new federal law really means:
First and foremost, this legislation "defends" against identity theft in exactly the same manner that a coroner "defends" against murder. By definition, you are searching for illegal activity that has already occurred when you monitor your credit report. Simply reviewing your credit report will not prevent a single thief from stealing your identity. At best, monitoring your report may allow you to catch a thief early, and begin the long, costly, tedious process of attempting to clean up the mess they made that much earlier, with no guarantee of success. But only the stupidest criminals continue to use a person's identity indefinitely. It is far safer for them to ruin your credit quickly, and move on to another victim, than to keep pretending to be the same person, especially when they know you will figure it out one way or another soon enough. Ms. Block's description of identity theft helps to perpetuate the myth that "identity theft" involves literally stealing another person's identity, as if plastic surgery and sleeping with your spouse were involved. The truth is, they are not stealing your identity, they are stealing your money, as quickly and quietly as possible.
Second, inmates in the American Debtors Prison have only one conceivable hope for ever getting out of debt: flying low under the radar and preventing the personal information brokers from tracking their every move and interfering with honest attempts to earn an income with which to pay their debts. In order to receive the free credit reports, debtors prisoners must provide a relative wealth of current, accurate information--including current address and the aforementioned "specific identifying information". Does this refer to current income perchance? Since most credit reports contain inaccurate information--not because of identity thieves, but because of credit bureau negligence--how can any personal information unquestionably identify an inquiring consumer better than their name and social security number? It seems the credit bureaus have found yet another way to extort current, accurate information from debtors prisoners which can and will be used against them outside a court of law: provide them this information "voluntarily", or they will refuse to send you your credit report, and you will risk having your identity stolen on top of all the other financial problems you already have.
Third, what kind of legislation designed to "protect" the American People from an urgent threat waits a year before going into effect, and then goes into effect in stages over the course of nearly one more year? It turns out that our Great Protector, the U.S. Congress, has done the credit bureaus a great favor by preventing tens of millions of consumers from demanding their free credit reports at once, which would require the credit bureaus to spend more money on creating new jobs, training, etc., than they will eventually earn by selling all the new personal information they are gathering in this consumer advocacy farce.
Fourth, it has been well-established for years that most consumer credit reports contain errors, including errors that can result in denial of credit, rental housing, employment, etc. The credit bureaus have never exhibited a sincere interest in gathering accurate information, because negative information implies that they are doing a better job of researching consumers than their competitors. Credit bureaus like negative information about consumers, and they are notorious for resisting all attempts to remove inaccurate information--even when required to do so by federal law. The only thing this new federal law does is make credit reports free (eventually). It doesn't compel the credit bureaus to finally comply with the Fair Credit Reporting Act or any other prior legislation designed to ensure that the credit bureaus only traffic in accurate information. Obtaining your own credit report should be free. Why do we need a slow-moving federal law to force them to be free, unless the credit bureaus have some kind of vested interest in preventing consumers from correcting errors in their credit reports?
Fifth, as mentioned in Ms. Block's article, consumers will still have to pay $4-$8 to learn their credit scores. If we assume that just one third of all Americans are adults, then somewhere around 100 million people must pay $4-$8 apiece to learn their credit scores. That translates to anywhere from $400 million to $800 million in annual revenue for credit bureaus, if every American adult sought to learn their credit scores, like the financial "experts" recommend.
Sixth, in his own article on the subject, Sam Hananel of the Associated Press writes that the Federal Trade Commission warns consumers to "beware of scammers who might send e-mails pretending to offer a free credit report as a way to elicit personal information." Translation: this new federal law may actually create more identity theft by helping scam artists who phish for "specific identifying information" by email, since millions of concerned and confused consumers have now been led to believe they have a powerful new weapon against identity theft.
The American Debtors Prison website (http://www.americandebtorsprison.com/) exists in part to explain the fine print of bogus "pro-consumer" legislation like this, which in fact is nothing more than a public-relations mirage that has been carefully crafted behind closed doors to ensure that the credit bureas will profit regardless. Shame on USA Today and other mainstream media for failing to investigate the stories they publish, and merely refashioning government press releases to make it sound like the U.S. Congress is truly protecting consumers. Congress should have forced the credit bureaus to prevent identity theft, since they are the ones who profit from invading consumer's privacy in the first place, just like identity thieves do....
All the best,
Paul
posted by Paul at 12:01 AM
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