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Credit abuse: a step in the right direction

By: Scott Bradner

I'm writing this just before the US Thanksgiving holiday and one of the many things I'm thankful for is the major credit reporting agencies finally understanding that they were a major part of the identity theft problem. Things are far from perfect in this area but there has been a significant, though small, step in the right direction.

One of the clear and present dangers of life in the US (and maybe elsewhere) in the last bunch of years has been the ever increasing flood of "pre approved" credit card applications showing up in our physical mailboxes. Merely discarding them leaves you open to exploit by crooks picking through your trash. Tearing them up does not help reduce the risk. A year or so ago one of the local TV consumer advocate reporters ripped up a number of the pre approved forms then taped them together and filled them out with inaccurate information (incorrect postal addresses for example). She then returned the forms. Most of the banks sent her cards. When asked about the obvious risk in granting a credit card to someone who sent in a taped together application the banks said they were satisfied that their verification process was just fine. (See http://www.cockeyed.com/citizen/creditcard/application.shtml for another example of the same thing.)

I've tried to use the credit industry process for opting out of these offers -- twice. The first time was about 2 years ago and the second about 9 months ago. I do not recall for sure but I think I used both the web site (https://www.optoutprescreen.com/?rf=t) and the phone number (1-888-567-8688). I will not claim that these are actually ways for the people pushing credit cards to find more victims but I have not seen any reduction in the number of offers, if anything, the number of offers has gone up. I now average about one a day, 6 days a week. Getting 5 offers in the same mail delivery the other day was what prompted me to write this column.

At least 39 states have passed laws that require the credit bureaus offer individuals the ability to place a security freeze on their credit records that will block such pre approved offers and generally block people from getting credit cards in your name. It took a very long time to get that far -- with the credit bureaus fighting against the idea every step of the way. But finally, even the credit bureaus began to be able to read the message and now the three major ones have "voluntarily" agreed to offer this ability in all states. Naturally, they charge money to stop violating your ability to protect yourself but at least everyone can now get a little protection from credit card companies that sent more than 5 billion offers in 2005 and would gladly send a card in your name to the 3 year old golden retriever down the street. (See http://www.consumersunion.org/campaigns/learn_more/003484indiv.html for more information.) I may have to wait until Feb 3, 2008 for the Massachusetts law to come into effect - I'm checking that out now - but if that is the case the credit bureaus will receive letters from me on Feb 4 (the 3rd is a Sunday) exercising my right to not have them risk my financial future in order to get richer.

disclaimer: Harvard, as a non-person, faces different threats and has not commented on this topic so the above is my own expression of limited thankfulness.