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Michigan Senate bill would help limit damage from identity theft

Oct 28, 2013 Dave King

Consumer credit reports can be damaged significantly by identity theft, as criminals generally attempt to open credit cards and loans with stolen names. As a result, people who become victims of this crime can struggle financially for a period of time as scores are repaired.

The Michigan Senate is considering a law that would help limit the damage caused by identity theft and allow consumers to put a freeze on their credit reports, according to Additionally, legal guardians would be allowed to put a freeze on accounts of children under the age of 16.

"It's a simple maneuver that needed to change in statute to allow consumers to put security freezes and thereby protect their kids and vulnerable adults and seniors from what has been estimated to be a $21 billion problem in the U.S. in identity theft," said bill sponsor Sen. John Proos.

Barry Paperno, community manager for, said that identity theft can cause people to lose more than 100 points from a credit score - all of which may not be regained when fraudulent credit information is removed from the record. Even if a credit score fully recovers, it could take weeks or months in certain instances.

With identity theft being such a damaging crime, financial institutions such as short term lenders need to be one of the first lines of defense. Strong ID verification procedures need to be put in place to ensure that applications aren't using false identities. During the holiday season, this crime may occur more frequently as more consumers shop online and at retailers, so staff at banks and lenders should be on high alert.