NEW YORK - Three years ago, Michael Steiner got a call from a bank asking him to confirm he had applied for a $20,000 personal loan. He hadn't, but someone using his name was seeking that money.
Mr. Steiner, a certified financial planner for RegentAtlantic Capital in Chatham, N.J., was a victim of identity theft. After months of dealing with bank security officers, collection agencies and law enforcement officials to clear his own record, he's become an advocate for practices to protect others from similar distress.
"The bottom line is that you can't totally insulate yourself from ID theft," Mr. Steiner said. "But there are measures you can take to greatly reduce the risk."
Consumers have a growing arsenal to use in the war against identity theft. Under the Fair and Accurate Credit Transactions Act of 2003, they are entitled to free credit reports each year from the three major credit bureaus.
The FACT Act also allows consumers to put fraud "alerts" on their credit bureau reports if they believe someone has stolen their Social Security number, credit cards or other personal data. Once the alerts are in place, banks, brokers and retailers are supposed to do extra investigation before granting new credit in the consumer's name.
Still, as Mr. Steiner and other consumer experts point out, these measures deal with ID theft after it's happened, not before. As a result, there's growing support for security "freeze" laws that allow consumers to block access to their credit reports unless the consumers give lenders permission to see them.
A dozen states have enacted freeze legislation, according to Ed Mierzwinski, the consumer program director for the Washington-based U.S. Public Interest Research Group. Besides New Jersey, they include California, Colorado, Connecticut, Illinois, Louisiana, Maine, Nevada, North Carolina, Texas, Vermont and Washington.
Similar legislation is working its way through the Georgia General Assembly - House Bill 966 drafted by state Rep. Rob Teilhet, D-Smyrna, and House Bill 1389 drafted by Rep. Tommy Benton, R-Jefferson.
Credit issuers are worried about the trend. Lenders told the congressional committees, for example, that freezes can interfere with the credit-issuing process, can be technically difficult to implement and the cost that may be passed on to consumers.
STEPS TO PROTECT CREDIT - Put passwords on credit card, bank and phone accounts.
- Avoid passwords based on easily available information, such as a mother's maiden name, a birth date or part of a phone number.
- Secure personal information at home, especially if there is a roommate, or if workers have access.
- Do not give personal information by phone, mail or Internet unless you initiated the contact or are positive of the other party. Remember that some thieves and their Web sites and e-mails can be very convincing.
- Shred discarded credit cards, charge receipts, credit applications, insurance forms, physician statements, checks, bank statements and credit offers.
- Call (888) 567-8688 if you want to opt out of credit solicitations.
- Order a copy of your credit report once a year from at least one of the three major nationwide consumer reporting companies and check the accuracy.
Source: Federal Trade Commissioncontact the bureaus
The major credit bureaus have Web sites and phone centers to deal with consumer queries about alerts. Equifax maintains www.equifax.com and (800) 525-6285; Experian, www.experian.com or (888) 397-3742, and TransUnion, www.transunion.com or (800) 680-7289.
The freezes currently are being handled through the states. A list of Web links to the various state agencies can be found on the Consumers Union site at www.consumersunion.org by clicking on the "Financial Privacy Now" link and then the "learn more" tab.