September 21, 2010
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News: Bill Would Make Consumers More Vulnerable
Millions of cardholders have had their personal information and credit card data stolen as cybercriminals gained new technology which allowed them to hack into some of the most prominent merchants in the world. Barely a retailer has escaped the embarrassment of being on the list of merchants who have had to notify its credit card customers that hackers have infiltrated their security systems. That same thing holds true for a large number of credit card issuers whose card processers have also fallen to the mercies of such criminals. As a result, the governing agency that regulates and monitors electronic payment processing, the Payment Card Industry Data Security Standard (PCI DSS) has handed down tougher rules for enhanced security that these companies must adhere to.
Credit reporting bureaus also provide a service to credit cardholders as well as all consumers that blocks any organization or individual from viewing their credit file without the consumer's explicit permission. This method freezes the individual's credit file whereby only that individual has the authority to unfreeze the account for viewing by another. This service provides a valuable tool to consumers in providing enhanced security while at the same time reducing the chances of becoming a victim of credit card or identity fraud. The service fills the gap which has existed for years and allowed thieves to open accounts in their victim's names.
In 2001, California was the first state to enact a law which allowed consumers to freeze their credit files. Since that time, an additional 24 states have enacted their own similar freeze laws. For the first time, consumers have felt more confident that their identities are being protected. However, the freeze has not been as well received in the credit card industry. In fact, many of them have rallied together in support of a law that is currently being proposed that is intended to over-ride the freeze law. If passed, the HR 3997 will not only take away the consumers control to protect their identity from fraud, but will only allow individuals who have already become victim of identity fraud to freeze their credit files. Isn't this a bit like saying "don't buy life insurance until you have passed?"