"Identity theft is
the top consumer crime in Colorado. Colorado is one of two states that do not
have strong laws on the books to prosecute criminals for identity theft. Last
year, the state ranked fifth, up from 11th two years ago, in the nation for
the number of identity-theft victims per capita, according to the Federal Trade
Commission (FTC). Complex identity theft crimes occur when thieves steal Social
Security Numbers or other personal data and use the information to take funds
by opening credit card accounts, renting homes or obtaining loans", said
Rex Wilmouth Director of CoPIRG (Colorado Pubic Interest Research Group).
Easy access to consumers'
confidential identifying information, including social security numbers, has
contributed to this epidemic. Credit card companies, merchants, credit bureaus
and other businesses do not adequately safeguard consumers' private financial
information, making it relatively easy for thieves to steal this data and use
it to take out new credit or to rack up charges on existing accounts.
"Victims of identity theft literally have their lives stolen. They face
credit and mortgage denials, out-of-pocket costs, and even arrest when mistaken
for the thief using their name", said Grayson Robinson the Sheriff of Arapahoe
County. The Federal Trade Commission (FTC) estimates that it took the average
victim of identity theft in 2004 600 hours and an average of $1,400 to clear
their name; cases average two to four years to be resolved. This is up from
175 hours and $808 in out-of-pocket expenses in 2000. The FTC estimates that
identity theft cost consumers $5 billion and businesses $48 billion last year.
And when a business, institution or other entity is sloppy with consumers' personal
information, it's the victim that is responsible for cleaning up the mess. "Colorado
legislators are looking at bills this year to get tough on thieves. Now it's
time to prevent the crimes by safeguarding personal information", said
Senator Dan Grossman.
"Often, all a thief needs is a social security number to open an account
fraudulently, and rack up charges in an innocent victim's name", said Zach
Friesen. Social security numbers were originally only meant for the federal
government's use to track wages and benefits. But now, these numbers are used
by a multitude of public and private institutions-such as health insurance companies,
universities, cell phone companies, utility companies and others-as identification
numbers, or as a security measure to confirm an individual's identity. The widespread
use of these numbers completely undermines the use of it as a security measure.
Widespread use also provides numerous opportunities for identity thieves to
gain access to valuable information.
While Colorado has taken some steps to protect consumers, more needs to be done
to prevent the crime and give victims the ability to clear their names. In the
report released
today CoPIRG is calling on the legislature to take the following seven steps
to help stop identity theft in Colorado:
1. Increase criminal penalties
for identity theft by making the crime a felony in Colorado.
2. Give consumers the right
to freeze thieves out of their credit files. Allow consumers to block access
to their credit reports and scores unless they affirmatively unlock their credit
files by contacting the credit bureaus and providing a security code.
3. Restrict the invasion
of financial privacy by eliminating the "credit header" loophole that
allows credit bureaus to share consumers' personal identifying information,
including social security numbers, to marketers and others.
4. Provide consumers with
low-cost monthly access to their credit reports so they may monitor them for
fraudulent activity.
5. Require businesses to
notify their customers when a security breach puts them at risk of identity
theft.
6. Prohibit businesses from
using consumers' social security numbers on identification cards.
7. Require businesses to
meet minimum standards for the proper disposal of documents that contain consumers'
private financial information, and extend this standard to any third-party vendors
that businesses use to destroy records.
