ANNAPOLIS- Maryland consumers may soon be able to put a freeze on their personal credit reports, making it harder for identity thieves to make fraudulent purchases, if a set of bills backed by state Attorney General J. Joseph Curran Jr. makes it through the legislature this session.
At a news conference Wednesday, Curran announced his support for bills introduced into both the House of Delegates and the state Senate that would give consumers the option of making their credit information unavailable to keep thieves from opening accounts with sellers of big-ticket items like cars or electronics.
“You release the freeze when you want to make a purchase, not when the identity thief wants to make a purchase,” he said.
To “thaw” their reports, consumers would be required to provide a personal identification number or password, wait for a period of up to three days, and possibly pay a fee of up to $5, depending on the reporting agency.
Delegate Neil F. Quinter, D-Howard, who introduced the security freeze bill in the House, said that the new option will help consumers avoid the difficulties of trying to rebuild their credit following a run-in with an identity thief.
“It’s like trying to put water back into a bottle,” he said.
Though a 21-member identity theft task force has been set up to make further recommendations to the legislature in 2007, Quinter said that increased security measures are needed this year, citing a recent instance in which thieves used a constituent’s credit to buy two trucks and a new cellular phone.
“There’s no reason why we should wait to enact these protections for consumers in Maryland,” he said.
Representatives of the industry that distributes consumer data to businesses say that the intentions behind legislation that gives consumers the freeze option are good, but run “counter to social phenomena,” namely, that most consumers do not plan their purchases.
“Most Americans now don’t balance their checkbook,” Norman Magnuson, vice president of public affairs for the Washington-based Consumer Data Industry Association, said in an interview.
Magnuson also questioned the security value of a system that would require consumers to unfreeze reports with a password or PIN, arguing that most people would opt to pick something that is easy to remember, just as people tend to use the same passwords for various Internet services.
John F. Cavanaugh, senior vice president of the Maryland Bankers Association, said that bankers in the state largely support the legislation, though his organization will be recommending a few technical amendments.
If the law passes as written, he said, banks chartered by the state could be put at a competitive disadvantage to those chartered by the federal government. Consumers with a freeze on their reports would be able to get home loans, for instance, from a federal bank, but not from a Maryland-chartered bank.
“It could really hurt the state banks,” he said.
Curran also announced at the conference his support for bills that would force businesses to alert consumers when their personal information is unintentionally released or when security is breached.
Sen. Leonard H. Teitelbaum, D-Montgomery, who introduced the Senate version of the bill, said the idea behind the legislation is to make consumers aware of the breach so they can take appropriate action.
“If they’re not aware of the problem, then, of course, they’re completely compromised,” he said.
Curran’s office unveiled a report Wednesday that included data from the Federal Trade Commission showing that Maryland ranks 11th in the nation in identity thefts. Curran said that the commission received over 5,000 theft complaints from Marylanders last year and that the number of thefts reported in the state had quadrupled over the past five years.