- The Washington Times - Sunday, March 12, 2006

A California company today plans to introduce an identity theft protection service that requires lenders and credit bureaus to double-check with consumers before issuing credit in their names or sharing their information.

But TrustedID Inc. has at least three hurdles to overcome.

First, those credit bureaus — Experian, Equifax Inc. and Trans Union LLC — already sell similar products. Second, federal law allows consumers to place free fraud alerts on their accounts. Third, consumer advocates say another intermediary simply is not needed.

The Federal Trade Commission estimates that about 10 million Americans a year report their identities stolen. TrustedID is targeting the roughly 3 million people who had new accounts opened illegally in their names last year, said company co-founder Scott Mitic.

“We want to help before the crime is committed,” he said. Customers will be able to sign up free for 30 days, but then will pay $7.95 per month for its credit-monitoring service that includes $25,000 of identity-theft insurance. TrustedID also requires limited power of attorney to act on customers’ behalf with credit bureaus.

TrustedID’s flagship product, IDFreeze, includes two key elements:

• Lender DoubleCheck, which requires lenders to check with consumers before issuing credit in their names.

• Credit Bureau DoubleCheck, available in states with credit-freeze laws, requires credit bureaus to check with consumers before sharing information about them with a lender.

Twelve states have credit-freeze legislation, which allows residents to block new creditors from accessing their credit reports and helps prevent identity thieves from opening spending accounts using a stolen name.

Consumer groups endorse the state laws but want them to apply to all consumers, not just identity-theft victims as some do now. Maryland, Virginia and the District do not have credit-freeze laws.

To freeze credit reports, TrustedID customers must send credit bureaus a certified letter, including a copy of the police report if they have one, proof of identification and any fees required by their state. Consumers then receive three personal identification numbers directly from the bureaus.

They enter those numbers into their TrustedID accounts and, when they apply for credit, use TrustedID’s Web site (www.trustedid.com) to submit the request to the credit bureaus to release the data, which can cost an additional $39.95.

TrustedID used “hundreds” of testers who liked the proactive service, Mr. Mitic said, but credit bureaus resisted the company’s efforts to freeze files, even in the states where freezes were allowed by law.

“There’s no advocate for the consumer in protecting their data today,” he said.

Credit bureaus and the nonprofit Consumers Union in Washington disagree.

“We don’t recommend that consumers pay money to protect their information,” said Susanna Montezemolo, a policy analyst for the Consumers Union. “There’s no need for consumers to pay over $100 a year to protect against identity theft. We don’t need another intermediary. Consumers need more control over that credit themselves.”

A fraud alert is free and lasts 90 days, and consumers need to contact only one of the bureaus to have a red flag placed on all three reports. The alert can be renewed every 90 days by calling a toll-free number, said David Rubinger, a spokesman for Equifax in Atlanta.

Steven Katz, a spokesman for Trans Union in Chicago, said Trans Union sells unlimited access to all credit reports and credit scores from all three credit bureaus, along with e-mail notification when accounts are added or changed, for $14.95 per month.

Experian sells similar services, including one that costs $4.95 per month to monitor reports from all three bureaus and notify consumers of changes. It includes $10,000 in ID-theft insurance, said a spokeswoman for the Costa Mesa, Calif., company.

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