While advocates, officials, and the online industry debate about the best way to shield Net users' personal information next week, forces will be at work in California to pass a consumer-protection law that aims to snuff out the worst privacy nightmare--identity theft.
Even before the advent of the Net, cases of credit fraud and identity theft were prevalent, experts say. But computer networks and Web sites increasingly collect highly sensitive personal information such as Social Security numbers, names, addresses, and credit card numbers. The information often is not safeguarded or is handed off to third parties without a person's permission. Moreover, a growing number of companies that issue credit cards or credit reports are setting up shop on the Net.
Although the widespread use of data security technologies such as encryption could help prevent interception of digital communication, privacy advocates argue that the unfettered collection of personal data via the Net is making this information vulnerable to leaks or misuse.
Two weeks ago, the Federal Trade Commission called on Congress to at least pass a law that protects young surfers' private data--with more recommendations coming later this summer. And, led by the Commerce Department, a White House summit about the online industry's efforts to shield privacy kicks off next Tuesday.
However, legislation is moving in the most high-tech state to give consumers some tools to protect their information.
A California Senate bill would require that credit bureaus give the state's residents one free report per year upon request to monitor credit data and to see if credit has been fraudulently taken out in their name.
The legislation states that credit card companies must personally verify with customers any billing address changes. One common scheme of would-be thieves is to have a person's credit cards mailed to a new address, where they are then stolen.
The bill also allows victims of identity theft to close off access to their credit file in certain circumstances. Then the consumer's ability to get a checking account, credit card, insurance, housing, or a driver's license could be restricted for a set period of time unless the person has an existing relationship with a lender or bank.
Major credit report agencies, such as Equifax and TransUnion, accept requests for credit reports online. But that policy is not always problem-free. Just one day after launching its site in August, Experian pulled its service after at least one customer entered all the correct access information but accidentally received someone else's credit report for $8.
Consumer groups are drumming up pressure to pass the bill, which will be considered by the Assembly Banking and Finance Committee on June 29. The ConsumerNetwork sent out email recently urging people to write legislators calling for passage of the identity theft bill.
"All consumers in the country should be able to get a free credit report per year--this is very important in reducing the damage of identify theft," said Beth Givens, project director for the Privacy Rights Clearinghouse. Givens said one way to curb identity theft is to never post resumes online. She said information pulled from resumes helps identity thieves put together the profiles they need to get credit in someone else's name.
"I've talked with thousands of identity theft victims and they often don't know how the person got their Social Security number, but indeed you can go on the Net and purchase someone's information," she added. "Credit granters need to take more care in verifying the identity of the applicant."