Identity Theft Hurts

The credit bureaus are no friend of consumers

By John Barksdale - 13 October 2008

Experian, Equifax and TransUnion employ the services of the Consumer Data Industry Association (CDIA). One of CDIA’s lobbyists and Vice President, -Eric J. Ellman, travels the country lobbying state legislatures to eliminate one of the few provisions victims of identity theft can use to protect their credit; the “credit freeze”.

What is a credit freeze?

A credit freeze allows consumers to lock access to their credit with a Personal Identification Number (PIN) with the three major credit bureaus and unlock their credit before purchasing services or goods on credit. Locking your credit files stops financial identity theft dead in its tracks and is far more effective than a “fraud alert”. The author himself has a lock on his credit reports.

Who opposes the credit freezes?

The CDIA sprang into action to convince federal lawmakers to weaken the introduction of strong consumer-oriented legislation that protected would-be and future victims of identity theft. In 2008, the CDIA spent $4,515,919 dollars lobbying federal legislatures. 39% of those contributions were to Democratic lawmakers, 36% to Republicans.

When the Montana legislature debated the merits of enabling consumers to place a freeze on their credit reports in 2006, the CDIA dispatched Mr. Ellman to weaken the legislation. Luckily for consumers, Mr. Ellman’s efforts failed in Montana.

By resisting efforts to help consumers, TransUnion, Equifax and Experian brought these pro-consumer laws on themselves. The big three bureaus reap huge profits selling your credit history to lenders, financial institutions and creditors, whether you’re applying for credit, out if a lender is extending credit to an identity thief on your behalf. I’ve long believed the big three credit bureaus could facilitate consumers’ access to their credit reports securely online and through technology, enable consumers to lock access to their credit reports at their convenience. A consumer could update their credit records with their current address, cell phone and work number and email addressesto make it easier for lenders to vaildate credit applications. The philisophical problem with easy-credit is that consumers must be given more control of their credit data. In 2007 Experian earned revenue of $3.4 billion dollars, Equifax earned $1.8 billion in revenue. TransUnion is privately-owned and doesn’t report revenue figures.

Which states help consumers of credit?

35 states have strong credit laws that help consumers, but Montana, Washington, Maryland, New Jersey, Utah and Delaware ordered the big-three credit bureaus to provide consumers with a four-digit personal identification number they could use to unfreeze their credit histories within 15 minutes. Unfortunately, this isn’t a federal standard but should be. Unfortunately, the big three credit bureaus won’t voluntarily enact this common-sense protection. As a victim of financial identity theft, I politely urge you to contact your legislators and ask them to enact consumer credit legislation that follows Montana’s model.

Mr. Ellman, I invite you and CDIA President Stuart Pratt to post your Personally Identifiable Information on http://identitythefthurts.com. Feel free to leave your Social Security number, drivers license, address and mother’s maiden name. Once you become a victim of financial identity theft, you and Mr. Pratt can experience your own financial identity theft credit nightmare.