Consumer Protection In The News

Maryland residents now have the option to restrict access to their credit reports.

In a law that went into effect yesterday, Maryland joined 35 other states and the District of Columbia in allowing residents to place a security freeze on sensitive information about their credit score. Five other states allow the freezes only for victims of identity theft.

The freeze allows customers to password protect access to their credit reports to prevent identity thieves from opening fraudulent accounts.

"I think the security freeze is going to go a long way," said Del. Ron George, R-Annapolis, who co-sponsored the legislation. "It's just a matter of making people aware. It's a first step, but it still goes a long way."

With the freeze in place, credit reporting agencies cannot release a consumer's information without prior authorization. The agencies also cannot insinuate the credit freeze is indicative of a negative credit score. The new law does not block customers' current banks and credit card companies from checking their credit scores for legitimate purposes.

The credit reporting agencies, Equifax, Experian and TransUnion, are allowed to each charge up to $5 to institute the freeze. People who have already been the victim of identity theft can sign up for the freeze for free.

According to the Federal Trade Commission, Maryland ranked 11th in the nation in incidents of identity theft in 2006 with 10,080 cases of fraud or 78.6 people out of every 100,000 state residents.

Identity theft may be becoming less lucrative as awareness grows and consumers keep a closer eye on their credit ratings. According to the FTC report, thieves only swiped $1,882 per instance of identity theft in 2006, down from $4,789 three years earlier. Half of those surveyed by the FTC reported no out-of-pocket expense as a result of having their identities stolen, but 10 percent reported losses greater than $1,200.

"Victims of identity theft spend thousands of dollars and countless hours trying to restore their good names," said Johanna Neumann, policy advocate for the Maryland Public Interest Research Group. "Thanks to tireless advocacy by advocates and victims, Maryland consumers have gained an effective tool to fight identity theft."

Maryland already has taken small steps to address the identity theft problem. Social Security numbers were removed from paychecks a year ago. Another measure that would have required businesses that keep customer information to periodically destroy it was killed in the face of opposition from retailers who say the data contain important market research.

While its priorities will likely revolve around the state's future energy needs and the collapsing housing market, Del. James King, R-Gambrills, a member of the Economic Matters Committee and co-sponsor of the security freeze bill, predicted identity theft will remain a high priority.

"Every year there's a new scam," he said. "It's imperative we stay one step ahead."