Frozen Credit

September 22, 2007 at 10:38 am | Posted in Uncategorized | Leave a comment

Identity theft is a constant threat of our increasingly digitalized United States economy. On freezing your credit reports from Freedom to Tinker and New law allows Texans to freeze credit reports by The Dallas Morning News’ columnist Pamela Yip both have brought the current changes and issues in credit freezing to public attention. However, each article examines different failings of the credit system.

Freedom to Tinker considers the credit authentication problem.

The proper answer, of course, is to arrange for SSNs to have no more value to an identity thief than your name and address. The unanswered question, then, is what exactly can replace it as an authenticator? One possibility, raised in the thread on car dealers who insist on fingerprints, is to require these sorts of transactions be notarized.

Ms. Yip examines the change in credit reporting.

The change in Texas law is significant because consumers now can head identity thieves off at the pass and deprive them of using a consumer’s credit report for a shopping spree.

However, continues with the sobering conclusion.

The law still isn’t able to keep up with identity thieves, who have become increasingly nimble and sophisticated at what they do.

While the advances have allowed United States residents more control over the use of their credit, the current system fails on several points. While Ms. Yip considers the current options available to U.S. residents, she overlooks the questioning the workings of the current system. On one hand this is because she writes about personal finance rather than the larger identity issues that Freedom to Tinker concerns. However, without questioning the system, her concerns for fixing the system and preventing identity theft are unlikely to be resolved, which is Freedom to Tinker’s point.

Particularly interesting in the comments of Freedom to Tinker’s post are the descriptions provided describing Switzerland’s credit reporting, essentially a state run as apposed to private corporations. Which begs the question of whether we should be trusting private corporations, with uneven interests in security individuals from identity theft. Ms. Yip notes duly that

Companies must do a better job of guarding sensitive financial information. There have been too many cases where customers’ Social Security numbers, credit card numbers and other valuable information have been found in the trash intact.

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