Consumer Law

Lenders' Negligence Adds To Problem Of Identity Theft

By M. Stan Herring

The New York Times has posted an article that discusses how lenders are adding to the problem of identity theft by still giving someone credit even if there are indicators of fraud. About 10 million Americans are victims of identity theft annually, partly because personal information (like Social Security numbers) is so easily accessible.

Chris Jay Hoofnagle, a lecturer at the University of California at Berkley, put out a report in which...

the Fair Credit Reporting Act that allows victims of ID theft to ask creditors for the fraudulent applications submitted in their names, Mr. Hoofnagle worked with a small sample of six ID theft victims and delved into how they were defrauded.

Of 16 applications presented by imposters to obtain credit or medical services, almost all were rife with errors that should have suggested fraud. Yet in all 16 cases, credit or services were granted anyway.

One victim found that out of the fake applications submitted in her name, four of the six had listed the wrong address, two had the wrong phone number and one had the wrong birthday. Another victim found that an identity thief had obtained a copy of his driver's license and was using the photo for identification, even though the two didn't look similar. Another man found that a Kohl's credit card was opened in his name, even though on the application his name was spelled wrong.

Increasing the penalties for imposters and identity thieves would certainly help curb the problem, but for that to be effective lenders also have to pay more attention and be willing not to give credit when there are blatant errors on an application that indicate fraud.

If you have had problems with identity theft and have questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

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Full post as published by Alabama Consumer Blog on April 14, 2010 (boomark / email).