Assemblywoman Sandy Galef is introducing a bill in the New York State Assembly to help consumers prevent credit theft before it can happen to them by allowing consumers to put a security freeze on their credit information at credit reporting agencies.
An example of the problem that New Yorkers are facing was recently expressed to Galef by a Westchester resident. The resident had found in his mailbox a credit card from Home Depot. Knowing that he had not applied for this credit card, he contacted the company. He found out that someone had impersonated him in Virginia and obtained instant credit at Home Depot, and then proceeded to run up a debt of $10,000 on the card. The resident was able to clear up the matter after an extensive amount of correspondence, but the damage had already been done.
"This is one aspect of the fight against the identity theft crisis that is sweeping the country," stated Galef. "Why do we have to wait until something happens before the consumer can protect his credit information? Each of us should have the right to prevent credit theft by ensuring that our credit information is protected."
Legislation similar to this has already been passed in California. The California Civil Code permits consumers to place a security alert on their credit reports. The code requires companies to take reasonable steps to verify a consumer’s identity, and to contact the consumer if he or she has provided a phone number before lending money or issuing credit. California Civil Code also permits consumers to place a freeze on their credit report and prohibits credit reporting agencies from releasing any information to third parties without the consumer’s consent if such a freeze has been put in place. It also sets up a password protected system to make certain that the consent of the actual consumer is obtained rather than that of an imposter.
"The introduction of this bill is a necessary first step in allowing New Yorkers the freedom to secure their credit and protect their finances," Galef said. "The area of consumer finance needs some form of regulation to guard against identity theft and the many problems it causes for our New York residents. This legislation will enhance New York’s efforts to protect the credit and identities of our many residents at risk."