Identity Theft Essay

1768 words - 7 pages

Identity theft is one of the most pervasive and rapidly growing criminal activities in America. It is also one of the most devastating crimes for victims. One of the most common forms of identity theft is credit and debit card fraud. Credit card fraud not only exposes private payment information to thieves, but possibly the cardholder's name, address, and social security number. A 2003 survey from the Identity Theft Resource Center found that approximately seven million people were victims of identity theft over the previous 12 months. 73% of respondents indicated that the theft of their identity involved the unauthorized use of their credit card information, while only 15% of these victims find out about the theft of their credit card data through proactive action taken by a business. Unauthorized access to credit information often results in a wide array of fraudulent activity and consumer debt, including new and unauthorized credit card accounts, bank accounts, loans, mortgages, and more. Consumers may find themselves in unauthorized debt up to hundreds of thousands dollars before they ever realize there is a problem.
Given new and increasingly advanced developments in security technology each year, consumers may be excused for believing that their private payment information is safe and secure in the hands of giant corporations and established, successful retailers. This is a dangerous assumption. Identity theft can occur anywhere and at any time. In April, 2011, an external breach of the Sony Corporation's intricate Playstation Network security system led to a weeklong outage for users. This breach exposed the identity information and credit card data of 77 million consumers. An equally devastating breach of consumer financial data occurred two years earlier, when the payment processor company Heartland Payment Systems reported that it had lost as many as 100 million users' credit and debit card numbers in January, 2009. As recent examples of widespread security failure at the highest corporate levels highlight the need for reliable protections that will effectively minimize consumer exposure to credit fraud. Potential victims do have options to protect themselves, but not all are equally effective. While consumers may choose from any number of privatized surveillance options to monitor their credit activity (services typically offered by independent security companies) this recourse does little to prevent identity fraud. Security surveillance flags fraudulent activity only after it has occurred. A security freeze (or "credit freeze"), on the other hand, is a proactive tool designed to prevent fraudulent activity before it starts.

The credit freeze
A credit freeze provides consumers with the option to "freeze" or lock lender access to their credit files at the three major credit bureaus, Equifax, Experian and TransUnion. Once a credit freeze is in place, no company (aside from companies the customer already...

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