By Jim Boren
February 26, 2005
I thought that buying a $60 shredder would solve the problem.
Grinding up junk mail containing credit card offers was supposed to make me less vulnerable to identity theft. It said so on the box.
Now I find that "dumpster divers" jump into trash bins at restaurants and businesses looking for credit card receipts and other documents that might be the gateway to stealing my identity. The divers especially like the bins behind banks and mortgage companies because discarded loan applications have all the information they need for their scams.
But my electronic umbilical cord also makes me a target. When I'm on the computer, I need to be wary of hackers "phishing" for my personal information by tricking me into believing that my bank is communicating with me about a problem with my account. The banks say don't fall for it because they never will ask for personal information by e-mail.
Even if I do everything right, the Federal Trade Commission tells me that thieves can steal from my mailbox and get newly issued credit cards or those pre-approved credit offers. You can't shred junk mail that you never see.
There are many other ways of stealing your identity, according to the FTC. It makes you wonder why there aren't tougher laws that would penalize businesses that don't protect your personal information. But that might cut into the profits of banks, credit card companies and credit bureaus so little is done.
This is the way we do business in the 21st century. It's estimated that 10 million people a year are the victims of identity theft, which apparently is an acceptable number based on the lack of action taken by government to stop it.
You have to wonder at what point will the business model change so that banks and credit cards companies become concerned enough to stop sending out pre-approved credit card offers that are so easily stolen. If 25 million people a year became identity theft victims, would that make it less profitable for the banks and credit card companies?
The banks, not surprisingly, don't see the credit card offers that flood your mailboxes as a problem. John Hall, spokesman for the America Bankers Association, said there are fewer pre-approved credit card offers than in the past. They are just more "targeted," he said.
But I'm looking at this all wrong, at least that's the banking industry spin. Hall says banks are actually providing a service because the credit card offers are how many consumers "shop for a card."
He does advise that offers should be torn up or shredded before thrown away. Hall also points out that banks protect consumers against any unauthorized transactions, and they use technology to identify unusual spending patterns to more quickly catch credit card thieves.
But unauthorized use of a credit card is mostly simple fraud. The problem with identity theft - when someone assumes your identity and uses it in dozens of ways - is that it continues to haunt you years after it occurs.
Your credit may be ruined and you can be getting bills for goods and services well after you thought the problem was fixed. You can even get hounded by collection agencies that don't buy your story that you're the victim, even if you have police reports to prove it.
It's a nightmare. A Sherman Oaks, Calif., woman I interviewed in 2001 didn't know her identity had been stolen until she got a call from a collection agency inquiring about an unpaid cell phone bill. Karen Brooks got a copy of her credit report and discovered that more than $300,000 in fraudulent charges had been made in her name.
She lost time from work and spent additional money trying to clear up the mess. The emotional toll this battle took was as bad as the financial cost.
"I spent days and weeks crying and felt violated and abused," Brooks said at the time. "I had very few bills and thought this could never happen to me. It's one of the worst experiences you can go through."
State Sen. Debra Bowen, D-Redondo Beach, is a leader on identity theft legislation, authoring the first credit report "freeze law" in the country in 2001. It gives Californians the right to freeze access to their credit reports, blocking thieves from opening new accounts. Texas, Vermont and Louisiana have copied California's law and 13 more states are considering similar legislation.
Bowen also expanded California's security breach notification laws, which require companies and government agencies to tell people when their sensitive personal information has been breached by a computer hacker or others.
Unfortunately, these measures come after the fact. What's needed are tough laws limiting access to information in the first place. Banks and credit card companies should not be allowed to send out a pre-approved credit card offer without a specific request from a consumer. Businesses with patterns of security breaches should face heavy fines and their top management should be criminally prosecuted in the most extreme cases.
It's time to get tough with identity thieves and the businesses that make their jobs so easy.
Distributed by Scripps-McClatchy Western Service, http://www.shns.com.