40% of Fraud Alerts Don’t Propagate
[Update 3: I should have disclosed affiliations with Debix in this post. See “Mea Maxima Culpa.”]
Debix is reporting that 40% of fraud alerts don’t propagate between all three major credit agencies. You remember those fraud alerts? They’re supposed to protect you from identity theft, right? Well, let me let you in on a secret.
Identity theft is the best thing to happen to the credit agencies since the creation of the SSN.
Identity theft helps them sell more products, like identity verification tools, to their customers. It creates a new line of consumer business, people who will often happily pay them $10 a month to tell you what lies they’re spreading about you.
Is it any wonder that the alerts don’t propagate? Is it any wonder that they’ve been sitting on this knowledge?
I’m very excited about the emergence of companies like Debix, who are not responsible for the problem, but are helping us understand and fix it.
[Update: The New York Times covers this, “ID Security Company Finds Snags in Fraud Alert System.”] [Update 2: Bob Sullivan has a story at MSNBC, “Fraud Alert System Broken, Study Says.”