Financial Privacy & Security News

State consumer organizations that have documented credit report errors and identity theft problems today announced that consumers in New Mexico will have new tools to fight these problems under a federal law that takes effect December 1. AARP and NMPIRG also urged New Mexico legislators to enact a new model state law to finish the job of protecting consumers from identity theft.

"Consumers should use our new federal right to a free report to check up on all three national credit bureaus with just one website visit, one phone call or one letter," said NMPIRG Consumer Advocate Ray Prushnok. "But don't be tricked into buying an over-priced, unnecessary credit monitoring service."

The groups said that consumers from New Mexico and other Western states can log onto the government mandated site annualcreditreport.com to get their free credit reports from Experian, Equifax or Trans Union.

Consumers in other states will gain this right over the next nine months.

While credit reports are free under the new law, credit scores, which are mathematical summaries of the report, are not.

NMPIRG recommended that consumers also obtain at least one low-priced score, for about $4-7, although they should avoid the high-priced credit monitoring services.

The groups emphasized the importance of obtaining your report and searching it for errors. Studies conclude that one in four credit reports have errors that could result in the denial of credit.

"Many seniors are unaware how credit reports impact their ability to obtain loans and credit lines at the rates they truly deserve, and even the premiums they are paying for their automobile insurance," said Advocacy Representative Michael Donnelly of AARP New Mexico.

"Seniors assume that the private sector analyzes each individual's own credit history and charges them accordingly. What they do not realize is that many sectors of the financial sector utilize a computerized database that may very well contain inaccuracies and information associated with another citizen who happens to share their same name," concluded Donnelly.

Other provisions of the new law, the Fair and Accurate Credit Transactions Act (FACT Act) take effect nationwide on December 1. These include the right to place fraud alerts on your credit report, to complain directly to your bank about mistakes on your credit report and to obtain information from businesses where you do not have an account but an identity thief used your name fraudulently.

Despite the new protections, NMPIRG opposed final passage of the FACT Act because it imposed unacceptable permanent limits on most state rights to protect their consumers.

The proposed State Clean Credit and Identity Theft Protection Act, prepared by NMPIRG and Consumers Union, publishers of Consumer Reports, would:

* give consumers the right to freeze access to their credit reports,

* ban the use of credit reports and credit scores for homeowner and auto insurance decisions,

* require police to take complaints from identity theft victims, and

* protect Social Security Numbers from misuse.

"Fortunately, Congress didn't completely eviscerate state rights to protect consumers, so NMPIRG has prepared a model law to prevent identity theft, which we will urge the legislature to enact," added Prushnok.