When did identity theft become a big problem?  Could it have been around 2000 or 2001?  Why do you ask, Professor?

Back in the days of all the arguing about the Gramm-Leach-Bliley Act of 1999 and then the Financial Services Modernization Act of 2000, which by the way, could be traced back as the beginning of the economic crisis, because of its deregul;ation of the finance industry, which in turn allowed all the credit trading and as we have been told was the “culprit” in the present economic situation.

But there was another argument in the opposition to these two pieces of legislation….it was the fact that the personal information of consumers was not adequately protected.  All the supporters of the Act assured the people that the Act was not going to effect consumers in anyway, but rather make it easier for the people to have access to loans to better their lives.

In a report written by the Electronic Privacy Information Center:

Consumers have no right under the GLBA to stop sharing of NPI among affiliates. An affiliate is any company that controls, is controlled by, or is under common control with another company. The individual consumer has absolutely no control over this kind of “corporate family” trading of personal information.

There are several exemptions under the GLBA that can permit information sharing over the consumer’s objection. For instance, if a financial institution wishes to engage the services of a separate company, they can transfer personal information to that company by arguing that the information is necessary to the services that the company will perform. A financial institution can transfer information to a marketing or sales company to sell new products (different stocks) or jointly offered products (co-sponsored credit cards). Once this unaffiliated third party has your personal information, they can share it with their own “corporate family.” However, they themselves cannot likewise transfer the information to further companies through this exemption.

Last year, identity theft cost the consumer billions upon billions, and it has been steadily on the rise since the enacting of the FSMA of 2000.

Sen. Dorgan of North Dakota said the the Act would put the US economy in peril in 10 years and so far …HE WAS RIGHT.  And consumer institutions were concerned that the people’s privacy was not protected in the ACT….so far…THEY WERE RIGHT!

So far the FSMA,  started in the Clinton Admin,  has been nothing but sorrow for the people of the US.  It helped make the economic crisis….it did not protect the consumer……and it definitely help turn the American consumer into an incurable credit addict…….it was a lose…lose…lose….piece of legislation that made millionaires into billionaires and the middle class into the homeless.

We can all be proud of Washington……(btw, that is sarcasm)