In this time of great financial uncertainty, Nick Clegg’s endorsement of ‘credit freezes’ for all – the ability for individuals to lock and unlock their own credit records – last week in Cambridge may not have received much media coverage. It should have.
NO2ID believes that giving people meaningful control over their own personal information is a truly radical and significant policy. It could, if broadly and properly applied, begin to carve out a genuine alternative to the database state. And in the immediate future it could also prevent a great deal of fraud at zero cost to the citizen, unlike the government’s grossly expensive and intrusive ID scheme.
What is a credit freeze? Quite simply, it is the ability for you to ‘flip a switch’ on your own credit record (held by any of the credit reference agencies) so that it is locked – at which point no-one can gain credit, loans or cards in your name. The service is already offered to victims of ‘identity fraud’ in the UK and more broadly across the US.
All reputable financial institutions should perform a credit check before providing a new financial product, so fraudsters would no longer – even if they have stolen your personal information – be able to apply for credit, loans or cards using your details. They could be locked out.
Think of a credit freeze as a safe for your good name and reputation. A safe to which you have the key, a safe which is stored by the credit reference agencies but over which YOU have control. If you want to apply for credit yourself, you simply unlock the safe and allow your details to be checked by the organisation to which you are applying – and then, if you are sensible, you lock it again. For a safe with an open door is no protection at all.
The best solutions are elegant. And what could be more elegant – and just – than giving control over personal information back to the person most likely to be affected by it, the person most motivated to look after it – the person to whom it belongs?
NO2ID applauds the positive thinking of Nick Clegg, Chris Huhne and all those who support meaningful, workable solutions such as credit freezes. If we are to defeat the ever-encroaching database state, providing long-lasting alternatives that put the keys to control in the hands of the citizen are the way forward.
* Phil Booth is the National Coordinator for NO2ID.
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How do you prevent people from fraudulently gaining access to the on/off switch, though?
By protecting it with a user-chosen password, as with ‘Verified by Visa’ and many online/telephone banking protocols? Something simple would work best.
If you want to find out more, check out some specific implementations in the US where credit freezes are mandated by law in 39 states already. A good starting point is here:
http://www.uspirg.org/financial-privacy-security/identity-theft-protection
What a brilliant yet simple idea!
Yes, great post Phil.And good to draw it to wider attention.
Phil
Yes, actually, I do think it sounds like a good idea, though no system is ever going to be completely fraudproof.
I think the scandalous thing is the appallingly low level of security that banks routinely work with. I just had to confirm the safe receipt of a new credit card by ringing up the bank and telling them:
(1) my address
(2) my date of birth and
(3) the card number.
Obviously (1) and (3) would already be in the possession anyone who had stolen the envelope or to whom it had been delivered in error, and (2) would be very easy to find out for quite a large proportion of the population.
Good to see the Lib Dems doing something positive about people’s personal information; any idea how we can encourage the party to start campaigning at the grassroots on issues like ID cards, routine Government access to phone and e-mail records, requiring an ID card to buy a mobile phone etc.? The odd pronouncement from Westminster is welcome but not really sufficient.
I am looking for some idea and stumble upon your posting
decide to wish you Thanks. Eugene