Michigan’s New Identity Theft Protection Act
By now everyone is aware of the growing problem of identity theft (ID theft). Lately it is the crime of choice among the computer savvy. In fact, ID theft is a worldwide problem and Michigan is no exception. According to the Federal Trade Commission, Michigan ranked 16th in the Nation regarding the number of ID Thefts in 2003, with 6,600 cases. While only 2.6% of Americans were victims of burglary in 2004, 4.8% of Americans were victims of ID Theft. This problem is only getting worse.
In an attempt to discourage identity thieves, Michigan enacted the Michigan Identity Theft Protection Act (MITPA), which took effect March 1, 2005. MITPA repeals Michigan’s old identity theft statute and replaces it with a tougher, yet more streamlined version.
The new law broadens the definition of “identity,” by replacing the term with the phrase “personal identifying information” (PII). PII is defined as “a name, number, or other information used for the purpose of identifying a specific person or providing access to a person’s financial accounts,” and includes a person’s address, telephone number, driver license number, social security number, place of employment, and bank account and credit card numbers.
MITPA also broadens the definition of what constitutes ID theft. MITPA prohibits an individual from using another person’s PII (alive or dead) with the intention to defraud or to violate the law in general; or using another person’s PII (alive or dead) by concealing, withholding, or misrepresenting the user’s identity in order to obtain goods, services, credit, money, property or to commit other unlawful acts.
In addition, MITPA now prohibits an individual from using another person’s PII to obtain non-monetary items as well, such as vital records, medical records or other information. Under this new law a person or business is also prohibited from selling another person’s PII, if the seller knows or has reason to know that the buyer is going to use the PII for identity theft. Although the old law did not grant victims of ID theft the right to sue the thieves in court, MITPA’s language appears to provide victims with civil remedies.
Under MITPA, it is now a misdemeanor for a creditor to discriminate against an ID theft victim (by, for example, refusing to extend credit), or to negligently extend credit to a would-be ID thief. These provisions specifically affect banks, credit card companies and mortgage lenders. MITPA also prohibits companies from denying public utility services to an individual if the business knows or has reason to know that the individual was, in fact, a victim of ID theft. The law creates a presumption that a person was a victim of ID theft if that person presents a valid police report and an affidavit to that effect.
For consumers, MITPA might curb some daily nuisances such as pre-approved credit card offers and blank checks sent by mail, both of which could provide a tempting opportunity for ID thieves. Pursuant to MITPA, businesses can no longer extend credit without using a reasonable means to verify the consumer’s identity. In addition, businesses can no longer solicit to extend credit to consumers who do not possess a valid credit card or who have not applied for a credit card within the previous year by sending unsolicited checks that include the addressee’s PII on their face; or unsolicited credit cards. If an ID thief obtains an unsolicited credit card or blank check, the business or person who extended the credit is specifically liable for any incurred charges – NOT the consumer. ID theft victims of discrimination or negligent credit extension can file criminal charges against creditors as well as sue them.
How Can you Avoid Identity Theft?
If you become a victim it takes a long time to get your credit and affairs back to normal. Follow these simple suggestions below to avoid ID theft:
- Don’t let your credit cards out of your sight. Don’t use credit cards in restaurants or other places where they can be taken away from your sight for even a minute. Do not let cashiers take your card away to process it or under the ruse that there’s a “problem.”
- Don’t be afraid to use your credit card over the internet – BUT – make sure you are logged into a secure website. A secure website will show up in your address window as – https:// – not – http://. Look for the telltale “s” after the “http.”
- Do not respond to telephone or online inquiries which require you to verify personal information. This is called “phishing.” Thieves posing as one of your creditors, banks, or some other business that you deal with will call or send an e-mail requesting that you provide information about yourself. NEVER ANSWER. Always handle these matters via U.S. mail or call the business and verify their need for information.
- Sign up for the National Do Not Call Registry (www.donotcall.gov); remove your name and address from the phone book and reverse directories – and, most important, from the marketing lists of the credit bureaus to reduce credit card solicitations. The site www.optoutprescreen.com can help.
- Consider calling the three credit bureaus and freezing your credit to prevent anyone from opening up new credit files in your name (you will still be able to use your credit- a password lets you gain access to it) This doesn’t affect your credit rating.
- Protect your home computer with a firewall, anti-virus, and Spyware cleaner software, especially if you have a high-speed connection (i.e. cable or DSL).
- Know who is using your social security number and for what reasons at all times. Refuse to give your Social Security number to merchants, and be careful even with medical providers. The only time you are required by law to give your number is when a company needs it for government purposes, like tax matters, Social Security and Medicare.
- Always destroy records and statements that contain your private financial information. The best way is to shred these documents. If you don’t have a shredder, make sure you tear or cut them up. To throw them away in one piece puts you in a vulnerable position for a thief to snatch your information.
- Always keep your ATM, credit card or gas station receipts.
- Make sure mail doesn’t sit in your mailbox for long — thieves like to snatch credit card offers. If you know you’re going to be away for a period of time, arrange to have someone collect your mail for you.
- Review your credit card and bank statements regularly and carefully. If some transactions look suspicious, file a dispute immediately.
- Be wary when someone is standing too close behind you at an ATM machine.
- Monitor your credit report on a regular basis. Pay for service that monitors your credit for you. Look for a credit monitor that reviews all three credit bureaus simultaneously. These services will send you e-mail or mail updates on a regular basis to inform you when someone inquires about your credit, opens a new account, or reports negative information about you. It is a great way to keep abreast of your credit. I recommend a service comparable to Equifax’s Gold 3-in-1 Service (see www.econsumer.equifax.com). As long as the service monitors all three bureaus it will provide adequate protection. Some credit monitoring services, like the above-mentioned Equifax Gold, also offer ID theft insurance as well. ID theft insurance is becoming more and more popular. Some homeowner’s insurance policies even provide coverage now. Usually it provides coverage of all attorney’s fees, costs, and other charges incurred in getting your credit back to normal.
- When ordering new checks, pick them up at the bank, rather than having them sent to your home mailbox.
These are just a few things of the things that you can do to help ensure against becoming a victim of ID theft. However, if you do become a victim of ID theft you should immediately do the following:
- Contact any one of the three Credit Bureaus and place a “fraud alert” on your credit report. The Bureau that you call will contact the other two.
- Close the accounts you think were tampered with.
- File a police report with your local police department.
- File a Complaint with the Federal Trade Commission.
You should also immediately contact an attorney to determine any other avenues available to you in order to fix your credit, deal with creditors, and pursue a remedy against the ID thief.
Michigan’s new ID theft law looks like a promising new discouragement against ID theft. It provides some stiff penalties against ID thieves as well as those creditors who help perpetuate ID theft. However, an ounce of prevention is worth a pound of cure. Quite simply, don’t let it happen to you. Recovering from an ID theft is a difficult, expensive and long process. Taking a few precautions now will prevent future exposure.