"This bill will not protect consumers, as its name would suggest, but will strip Wisconsin consumers of important identity fraud protections that are already in place," Doyle said.
In March, Doyle signed a state law creating the credit freeze law (Wisconsin Act 140) which is scheduled to go into effect in January. Placing a freeze on a credit report will prevent a credit reporting agency from providing information about the consumer in response to a request for new credit, such as a new credit card. Therefore, an identity thief who wants to obtain credit with a stolen name will be turned down because the entity being asked to extend credit will not be able to get any information about that consumer.
The Financial Data Protection Act will not permit consumers to place a freeze on their credit reports to prevent identity theft, pre-empting state law. The bill, if passed, will permit a credit freeze only after the consumer's identity has already been stolen.
"This is like saying that consumers can't put a lock on the doors to their homes until after they've already been burglarized," said Doyle in a letter to the delegation.
Current federal law permits consumers to place a fraud alert on their credit reports if they are concerned about a possible identity theft. This alert, however, can last for no more than 90 days. Consumers who have had their personal information compromised are potential identity theft victims for years and a 90-day fraud alert, provides little, if any protection. A credit freeze, however, provides continuing protection until the consumer decides to release the freeze.
The Federal Trade Commission reports identity theft claimed 10 million victims in the United States in 2005 and that credit card fraud is the most commonly reported type of identity theft. In Wisconsin, it is estimated that identity theft costs consumers and businesses approximately $950 million annually.
