An estimated 26.5 million U.S. military veterans may be at higher risk for identity theft because personal data about them was stolen from a Veterans Administration employee who improperly took the material home. The data stolen included such sensitive information as names, Social Security numbers, and dates of birth about veterans or veterans’ spouses. Armed with this information, a crook could easily open fraudulent new accounts for credit or services.
Current federal law gives identity theft victims, and those with a good faith belief that they are about to become victims of such fraud, the right to place only a 90-day initial fraud alert on their credit file. All consumers who do so are entitled to a free credit report. Initial fraud alerts instruct creditors to exercise more care to verify the identity of the credit applicant. Identity theft victims may choose an extended fraud alert good for seven years.
Unfortunately, these fraud alerts do not stop distribution of the credit report or credit score, which means that an identity thief may still be able to open new lines of credit using stolen information.
Veterans and other consumers living in some states can take advantage of an additional and stronger safeguard. Consumers living in California, Connecticut, Louisiana, Maine, Nevada, New Jersey, North Carolina currently have the right to put a security freeze on their credit files. A security freeze lets the consumer stop anyone from looking at his or her own credit reporting file for purposes of granting credit unless the consumer chooses to let that particular business look at the consumer’s information.
A security freeze enables a consumer to prevent anyone from looking at his or her own credit files for the purpose of authorizing new accounts unless the consumer chooses to lift the freeze for a specific period of time. This gives the consumer control over who has access to essential information needed to process a credit application and prevents crooks from opening new accounts in the consumer’s name.
Most businesses will not issue new credit or loans to an individual without first reviewing his or her credit report or credit score. If an individual’s credit file is frozen and an imposter applies for credit in that individual’s name, a creditor likely would deny the imposter’s application, preventing an instance of identity theft. In addition, if a request for credit is made on a frozen account, then the credit bureau would be required to notify the consumer about the attempted fraud.
Security freeze laws covering all consumers also have been adopted in Colorado, Kentucky, Utah, and Wisconsin, but have not gone into effect yet. Kansas, South Dakota, Texas, and Washington have adopted security freeze laws covering consumers after they become victims of identity theft. Lawmakers in Illinois and Vermont recently passed legislation strengthening the security freeze laws in their states so that all consumers are covered. These bills must be signed into law by Governors in each state in order to become law.
For more information about state security freeze laws and how to use them to protect yourself, see:
http://www.consumersunion.org/campaigns//learn_more/003484indiv.html.
For information detailing the many steps that individuals should take after a security breach, see: http://www.privacyrights.org/fs/fs17b-SecurityBreach.htm
For information about what Congress and state legislatures are doing on identity theft and data security issues, see: www.financialprivacynow.org.