E-Mail to My Congressperson Advocating Universally Available Credit Freeze

June 29: The computer stolen from the Veterans Administration has been recovered, and per the FBI, the data was never accessed.
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This was sent to Congresswoman Jean Schmidt yesterday when I learned that federal legislation limiting credit freezes to only cases of known identity theft appears to be rapidly making its way through the legislative process (links were not in original e-mail; slight revisions have been made to reflect that fact and to include more factual references):

Congresswoman Schmidt:

At one of your town meetings last year I asked you about credit freeze legislation. A credit freeze prohibits anyone besides you from accessing your credit file, period. If you have a freeze on, your credit files cannot be accessed by anyone unless you go through a procedure to unfreeze it. Upon hearing of it at the town meeting, you said that it seemed like a really good idea.

The credit freeze is the best tool available to prevent much of the damage of identity theft. Recognizing this benefit, 17 states, according to this USA Today article, have passed a credit-freeze law that allows anyone to freeze their accounts.

Unfortunately as the USAT article also notes, the proposed Financial Data Protection Act of 2006 (FDP — HR 3997; links to legislation often get moved), which is apparently making its way quickly through the House, will pre-empt all state laws and allow freezes only in cases of actual identity theft. This is classic “lock the barn door after the horse has escaped” thinking.

The idea of pre-empting what will surely soon be 50 different state laws on credit freeze procedures makes sense. But limiting freezes only to those who are actual victims of identity theft does not.

If the FDP Act passes in its current form, the millions of veterans and current servicemen, and millions of other Americans (Ohio University, with three affected groups; US Department of Energy; American Institute of CPAs; Hotels.com; The Archdiocese of Cincinnati; and there are many, many more) who have had the integrity of their personal data compromised due to data breaches just in the past few months would be prevented from doing what should be done to prevent new accounts and other services from being opened in their name — until someone actually inflicts damage on them.

There is a fundamental misconception at the three big credit bureaus (Experian, Trans Union, and Equifax) who are responsible maintaining the integrity of and controlling access to our credit files. These three companies seem to think our credit information is their data. They are wrong; IT’S OUR DATA, and they just happen to have stewardship responsibilities over it. Universal access to the ability to put a credit freeze in place will establish the principle of “who owns the data” once and for all.

The current legislation allows for fee-free credit freezes and removals of freezes. The fee-free nature of credit freezes should remain even when the universal access you should insist on is permitted. My cable company, utility, and bank don’t charge me separately to see what’s in my account or to handle payments; it’s a part of their cost of doing business. Similarly, the costs involved in layering an already-developed credit-freeze system on top of current credit reporting procedures for all 50 states, and of maintaining that system, should be borne by the credit bureaus, and passed on to their financial services and other clients, if necessary, in the form of slightly higher fees.

Because the financial community, the government, and other datakeepers have manifestly failed to safeguard our data, and probably will occasionally continue to do so in the future despite their best efforts, consumers who wish to have the protection need to be able to padlock their credit files with a credit freeze to minimize the potential damage.

Many of your constituents, including the elderly, young children, and those who have no need to access their credit files are sitting ducks for identity thieves in the current system. The credit freeze will limit that vulnerability to the use of existing accounts, which can simply be closed by consumers when they became aware that their identity has been stolen.

I therefore encourage you to reject The FDP Act of 2006 unless it includes ironclad universal credit-freeze language.

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UPDATE: This link indicates that 22 states have some kind of credit freeze in place.

UPDATE 2: Moderate Mainstream reminds me that the proper terminology is “We should have control over how our data is used and accessed” (the data on file at the credit bureaus is technically not OURS, as in we don’t own it; but we should have control over those who are safeguarding it at the credit bureaus.