Picture this scenario: after a long hard day working to make ends meet, you come home and sit down to one of your least favorite activities–paying the bills. You open your credit card statement and find that you have apparently purchased a big-screen television, a stereo system, and a 12-piece dining room set that certainly won’t fit in your eat-in kitchen!
Over the last decade, a relatively new crime known as "Identity Theft" has been causing ever-increasing problems for many people across our nation. Due to the availability of information in computer databases, increased use of credit, debit, and ATM cards, and the growth of internet commerce, identity theft has become the number one financial and consumer crime of the information age. It is truly the dark side of the electronic age.
Identity theft occurs when someone obtains personal information about you, such as your social security number, credit card, or bank account numbers, and uses it to obtain credit cards, clear out your checking account, or otherwise illegally conduct business in your name.
According to a national survey conducted by the Federal Trade Commission (FTC), nearly 10 million Americans fall victim each year, including almost 700,000 New Yorkers. The Identity Theft Resource Center reported in 2004 that as a result of these crimes each victim spent an average of 330 hours resolving these problems, and paid between $851 and $1,378 in out of pocket expenses (excluding a median of $4,000 per individual in lost wages in 2004). Additionally, identity theft cost US businesses nearly $48 billion annually, and consumers an additional $5 billion per year.
To help resolve this very serious problem, I have joined with a number of my colleagues to co-sponsor legislation (S.3494) that would allow consumers to put a "security freeze" on their credit information. This "freeze" would act to prevent thieves from getting credit in their name, by locking access to their consumer credit report and credit score. When this "lock" is added to a credit report, all third parties such as credit lenders or other companies will not be able to access a credit report without the consumer’s consent. With the "freeze" activated, an identity thief is effectively prevented from establishing credit in another consumer’s name, since the creditor would not have access to to the consumer’s credit report, and consequently would not approve the application by the impostor.
By providing several essential safeguards and remedies that protect New York consumers from identity thieves, this legislation will both help prevent identity theft, and reduce the time, energy and money that victims must expend to clear their reputations and reestablish good credit histories. At least 12 states, including New Jersey, Connecticut and Vermont, have implemented or have passed security freeze laws. The interests of consumers are best served by New York State joining their ranks and passing our own security freeze laws.