Fergie's Tech Blog

ID Security Company Finds Snags in Fraud Alert System

Tom Zeller Jr. writes in The New York Times:

Consumer advocates have long complained that the fraud alert system mandated by Congress in 2003 as a consumer’s first line of defense against identity theft does not always work properly.

So a company seeking to enter the market for identity theft prevention services recently recruited 54 data security and privacy experts to test the system. They claim to have found some kinks, although the credit reporting agencies beg to differ.

Julie Fergerson, vice president for emerging technologies at Debix, the company that produced the study, said that in 40 percent of the cases she examined, it appeared that fraud alerts had failed to put all the reporting agencies on notice to prevent new credit accounts, loans and other debts from being opened in a consumer’s name without a verifying phone call from the creditor.

The implication, Ms. Fergerson said, is that “you’ve got millions of people who think that they have fraud protection in place when actually they don’t.”

posted by Fergie @ 8/22/2006 10:31:00 PM