The Colorado General Assembly
took a major step in the battle to stop identity theft when the Senate passed
Senator Dan Grossman's and Representative Angie Paccione's Security Freeze Act
(SB05-137) by a 24-10 vote in the Senate and a 59-6 vote in the House of Representatives
in May. Governor Owens signed the bill into law on June 1st. The bill allows
victims of identity theft to place a security freeze on their credit report
to prevent thieves from taking out credit in their names. The Senate passed
the bill in April and approved the amendments made in the House in May.
"For the first time,
the general public and victims of identity theft will have direct control over
their credit reports" CoPIRG director Rex Wilmouth said. "By controlling
who has access to their accounts, victims of identity theft will be able to
stop identity thieves in their tracks."
Identity theft occurs when
a thief steals the vital information of a consumer and uses it to create new
financial accounts, new identities, or to simply steal money from existing accounts.
In 2005, Colorado ranked 5th in the country for total victims of identity thefts
per capita, up from 11th over 2003. Unfortunately, each victim can expect to
spend an average of 600 hours and $1,500 repairing their credit. The thief can
expect to make $4,800 from each victim on average, $10,200 if they can get new
credit cards and bank accounts opened in the victim's name.
"The recent wave of
identity theft scandals has made clear that most consumers don't have the tools
they need to protect themselves from fraud," said Wilmouth. "The General
Assembly and now the Governor has taken action to give identity theft victims
and general consumers an important new way to protect their financial identity."
"This legislation gives
consumers power to help protect themselves against identity thieves and the
comfort that they have the power to control whom looks at their information"
Senator Dan Grossman said. "With identity theft on the rise, consumers
need additional weapons to fight back against criminals who are seeking to steal
their good credit or their name. Without the ability to freeze your credit,
you may be powerless to stop identity theft."
The Security Freeze Act
allows and consumer to put a freeze on their credit report. With a security
freeze in place, a consumer's credit report and credit score cannot be shared
with any potential creditors unless the consumer decides to unlock the files
by contacting the credit bureaus and providing a security code. As a result,
even if an identity thief has stolen a person's information, the thief would
not be able to open new accounts or change vital information on a person's credit
report, like an address or name. People who choose to freeze access to their
credit report may temporarily lift the freeze for new loans and credit they
apply for themselves.
