A leading consumer organization that has documented credit report errors and identity theft problems announced today that consumers in the Northeast will soon have new tools to fight these problems under a federal law taking effect in 14 Northeastern states (SEE BELOW), Puerto Rico, the District of Columbia and all U.S. territories on September 1. Other regions of the country gained free report rights beginning last December. U.S. PIRG also urged citizens to call on Congress to preserve state rights to enact strong identity theft protections.
“Starting this week, consumers can check up on all three national credit bureaus with just one website visit, one phone call or one letter,” said U.S. PIRG Consumer Program Director Ed Mierzwinski. According to a 2004 PIRG report, 1 in 4 credit reports contain serious errors that could cause a consumer to be denied credit.
Consumers can log onto the government mandated site www.annualcreditreport.com to get free credit reports from Experian, Equifax or Trans Union. Because scam artists have purchased many similar web addresses, consumers may want to instead call 877-322-8228 to obtain their reports. While credit reports are free under the new law, credit scores, which are mathematical summaries of the report, are not. U.S. PIRG recommended that consumers also obtain at least one low-priced score, for about $4-7, although they should avoid the high-priced credit monitoring services that the bureaus also promote. This month, the Federal Trade Commission fined the credit bureau Experian $950,000 and ordered it to make refunds to consumers who had purchased its deceptively marketed credit monitoring services.
“Instead of paying for an over-priced deceptively advertised credit monitoring service, consumers should consider staggering requests for free reports by ordering one now and then one from each of the other two bureaus every four months,” advised Mierzwinski.
Other provisions of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), took effect nationwide on December 1, 2004. These include the right to place fraud alerts on your credit report, to complain directly to your bank about mistakes on your credit report and to obtain information from businesses where you do not have an account but an identity thief has used your name fraudulently. Despite the new protections, U.S. PIRG opposed final passage of the FACT Act because it imposed unacceptable permanent limits on most state rights to protect their consumers.
“Fortunately, Congress didn’t completely eviscerate state rights to protect consumers in 2003, so the PIRGs prepared a model law to prevent identity theft, parts of which have been enacted in two dozen states this year,” added Mierzwinski. “Unfortunately, in response to the widely reported security breaches at companies ranging from Bank of America to Choicepoint, Congress may pass a weaker federal law that also eliminates the right of the states to continue to better protect consumer privacy.”
Highlights of that 2004 model state law, the State Clean Credit and Identity Theft Protection Act, prepared by U.S. PIRG and Consumers Union, publishers of Consumer Reports, include the following key provisions under threat of federal preemption:
- It gives consumers the right to freeze access to their credit reports (In 2005, at least eight states have joined California, Texas, Louisiana and Vermont in providing this right); and
- It gives consumers the same right to security breach notification as California provides. This year, an additional twenty states have also enacted breach laws.
“We wouldn’t even know about all the security breaches nationwide if not for California’s pioneering breach notification law,” added Mierzwinski. “Yet, Congress may cave under industry pressure and enact a weaker law while preventing states from passing stronger ones.”
14 Northeastern states now eligible for one free credit report per year from each of the three credit bureaus: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, Virginia, and West Virginia