Identity Theft Hurts

A federal court in California recently ruled that companies selling “identity-theft protection” were violating federal law in Experian v. LifeLock.  Federal law requires the consumer (not victim?) to contact Experian, Equifax or TransUnion directly.  I cannot prove, but suspect the lobbyists for the main credit-reporting agencies made certain that language was inserted to “protect” consumers.

The main reason Experian took LifeLock to court was that renewing the “fraud alerts” on consumer accounts was costing Experian money; “Millions of dollars in processing fees”.

If a fraud alert is set on an account, when a bank or retailer runs a credit check on someone for a new account, the bank or retailer is required to call that person or use any other “reasonable policies and procedures” to verify the applicant’s identity if a fraud alert pops up.

In my opinion, if this threshold of verification was observed every time a line of credit (debt) were applied for, financial identity theft crimes would plummet.

The financial identity theft victim gets stuck with the problems that “easy credit” create.

John Barksdale