Is your personal data next?

Beating up ChoicePoint doesn't solve the problem
Companies like ChoicePoint have taken a public beating in recent weeks, with government officials critical of the firm's data gathering and storage practices. 

While it's clear ChoicePoint and the other companies involved in data leaks didn't do enough to secure the private information it stores, beating up these organizations will do little really to stop the problem of identity theft. Criminals will just find another source of the data. Congress will continue to hold hearings, and debate measures such as limitations on the sale of Social Security numbers. That's a step worth exploring, but it will only stop legal sale of SSNs. Illegal data sales, and thefts, will continue unabated -- as long as the data remains so valuable.

While federal legislators have yet to take on easy access to instant credit, many state legislators are doing just that. About 20 states are considering laws that would allow consumers to lock down their credit reports, preventing anyone from obtaining instant credit by using their personal information. It's called a security freeze.

Interactive Identity theft What to do when it happens

Such laws would not prevent data theft; but they would make stolen data much less valuable to the thieves. For those who have already been victims of identity theft, placing a security freeze on credit files offers an instant source of comfort. Those at high risk for ID theft, such as those going through divorce or those facing domestic violence, may also find the measure comforting.

One might think a law that require people to stop and think for a moment before making a big purchase like a house, car, or plasma TV could find supporters among retailers and creditors concerned about deadbeats. After all, the industry spent years begging Congress to pass a law that would make it harder for consumers to declare personal bankruptcy.  Because a security freeze must be "thawed" ahead of any credit purchase, it would require consumers to think ahead more, and could promote better financial planning.

Instead, lobbying efforts by the credit and retail industries have helped kill freeze bills in four states. 

But credit freezes are taking hold in other places.  All Californians and Texas residents who have been victims of identity theft already have the right to a security freeze. Louisiana and Vermont residents will be able to implement freezes once those states' laws take effect on July 1. And Washington state legislators passed their version of the law last week. Legislation in about 15 other states is still being considered.

The credit industry is correct that many consumers may choose not to take the extreme step of a credit file lock. In California, only 4,000 people have filed for freezes so far, though many consumer advocates say that's because most consumers don't know they have the option.

But even if the choice is deliberate, giving consumers that choice is critical.  Many consumers choose today to not lock their car doors. But the auto industry has repeatedly responded to the problem of auto theft, adding electronic devices, car stereo face plates, and electronic ignition keys. There are a host of things consumers can do to decrease the odds that their car will be stolen. Not so with their identity.

Consumers needs a choice
America's credit industry must offer consumers similar choices. Today, there is nothing a consumer can do to prevent an episode of identity theft.  Personal data lands on the computers of firms such as ChoicePoint without the consent of the consumer. It may then be stolen without their knowledge. The best a consumer can do is find out after an identity theft is already under way. 

If the last six weeks' worth of database heists have attracted any meaningful attention to the problem, federal legislators and financial institutions must recognize that the dam of personal information is broken. It's a question not of if, but when, their personal information will flow over the banks during the next data leak.

Given that reality, people need a tool that them to lock the doors on their digital lives. Consumers deserve the option to move their personal information out of the identity theft flood plain, up to high ground.  

Bob Sullivan is author of  Your Evil Twin: Behind the Identity Theft Epidemic

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