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Imagine that after years of careful planning and saving, you have found the ideal home for your family. As a first time buyer, you are anxious to achieve the American dream of home ownership. But just when it seems your dream will become a reality, your hopes come crashing down. You are denied the necessary credit to buy the house. It takes weeks to uncover the truth, but what you find out shocks you – a stranger has been piling up thousands of dollars of debt in your name. Your identity has been stolen.
Unfortunately, this scenario is played out thousands of times each year as the identities of innocent Americans are snatched away, often without their knowledge or only finding out when the creditors start calling.
In November, the Senate passed legislation to strengthen our national credit system, taking steps to combat credit fraud and identity theft, and provide important new consumer protections. The legislation passed by a vote of 95-2 in the Senate and 392-30 in the House, demonstrating the importance Congress has placed on ensuring a fair credit system for all Americans.
Modern technology, which has revolutionized every area of our lives from kitchen appliances to the cars we drive, has dramatically altered the financial industry as well. It’s hard to even remember the days when the only place you could withdraw money was from the teller at your local bank. But now, with the swipe of a card, you can access your accounts from a café in Italy or the corner grocery store in Killeen. You can also apply for a home mortgage on the Internet or get a loan for a new car while on vacation in Colorado. While this has made banking and credit transactions effortless for consumers, it has also opened up a Pandora’s Box of fraud opportunities for willing criminals. The Fair Credit Reporting Act (FCRA), which became law in 1971, did not anticipate the technological wave of the 21st century.
Congress needed to act to protect the public without hampering their ability to get credit cards, loans and mortgages. By updating the FCRA and implementing a number of important new provisions, we did precisely that.
The legislation we passed enhances the ability of consumers to combat identity theft; increases accuracy by providing them greater notice about, and access to, their credit information; allows consumers to exercise greater control over the use of their personal information for marketing solicitations they receive; and restricts the use and transfer of sensitive medical information. It also establishes a Financial Literacy and Education Commission to help inform consumers about the rights, responsibilities and resources associated with their financial information.
Another important provision requires credit agencies to notify each other of cases of identity theft in order to limit the impact on victims. Instead of making three, four or ten calls to report fraud, you soon will be able to make just one.
While the legislation will go a long way toward empowering you with more information about your credit record, vigilance in protecting your information is vital. In the case of identity theft the best defense is a good offense. According to the Federal Trade Commission (FTC), “you can’t guarantee that you will never be a victim, but you can minimize your risk.” The FTC offers the following practical advice on how to prevent identity theft:
· Don’t give out personal information on the phone, through the mail or over the Internet unless you’ve initiated the contact or are sure you know with whom you are dealing.
· Don’t carry your Social Security card; leave it in a secure place.
· Guard your mail and trash from theft.
· Give your Social Security only when absolutely necessary.
· Pay attention to your billing cycles. Follow up with creditors if your bills don’t arrive on time. A missing bill could mean an identity thief has taken over your account and changed your billing address to cover his tracks.
· Be wary of promotional scams. Identity thieves may use phony offers to get you to give them your personal information.
· Keep your purse or wallet in a safe place at work as well as any copies you may keep of administrative forms that contain your sensitive personal information.
· Cancel all unused credit accounts.
· When ordering new checks, pick them up at the bank, rather than having them sent to your home mailbox.
By managing your personal information widely, cautiously and with an awareness of the issue, you can help guard against identity theft.
Visit the FTC’s Identity Theft website at: http://www.consumer.gov/idtheft/ for more information.
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