"The security freeze is the only tool that's proven effective in stopping identity thieves in their tracks," said Bowen, who authored California's first-in-the-nation security freeze law in 2001 and a number of the state's other ground-breaking identity theft prevention laws. "When you freeze your credit report, you're safe even if someone gets their hands on your Social Security number because anyone who applies for a car loan, credit card, mortgage, cell phone service, or anything else using your name and Social Security number will run into a brick wall."
Under California law, SB 168 (Bowen) which took effect in 2003, credit reporting agencies must allow people to place a "security freeze" on their credit reports in order to prevent identity theft. People who place a freeze on their credit report can already lift the freeze in order to get, for example, a new loan or credit card, but currently it can take up to three days to lift the freeze. SB 1744 requires credit bureaus to give people the ability to lift a freeze on their credit report within 15 minutes by September 1, 2008. The credit bureaus must already set up systems to do 15-minute lifts for residents of Utah and New Jersey under new laws passed in those states.
"When I first created the credit freeze law five years ago, giving credit bureaus three days to lift a person's freeze made sense because it was a brand new animal and I was more concerned with them getting it right than with getting it done fast," continued Bowen. "Now that the credit bureaus are being required to give people in other states the ability to lift a freeze in 15 minutes, it only makes sense to give California shoppers that same right."
The average identity theft victims spends 330 hours, $851 in out-of-pocket expenses, and $1,820 in lost wages trying to clean up their name and get their life back to normal, and identity theft costs the U.S. economy some $50 billion every year. The Federal Trade Commission's January 2006 Consumer Sentinel report showed California still ranks third behind Arizona and Nevada in per capita identity theft and still holds four of the top ten slots in per capita identity theft-related complaints by metropolitan area.
"You don't have to wait three days to take money out of your bank account and in this day and age, there's no reason why it should take three days for your credit report to thaw," continued Bowen. "A week doesn't go by when there isn't a story about a hacking incident or some company that's accidentally released people's Social Security numbers, making them prime candidates for identity theft. Making the credit freeze easier to use means people can take steps to protect themselves to ensure that if a hacker gets access to their personal financial information, they won't become another identity theft statistic."
SB 1744 is supported by the California State Sheriffs' Association, Consumer Action, Consumers Union, and Privacy Rights Clearinghouse. The bill now goes to the Assembly.
