Friday, March 29, 2013


California Legislative Alerts:

On this page, Consumer Action highlights important California legislation and other state issues relating to privacy.


NEW: Stop AB 241's wasteful corporate welfare

Consumer Action regrets that it must oppose AB 241, because mandating bulk purchases of credit monitoring products from “identity protection” companies in the event of a state data breach would be both wasteful and ineffective, and would be a disservice to potential victims of a breach.

Unfortunately, the dirty secret of “ID theft protection” and credit monitoring products is that they do virtually nothing to prevent identity theft; they just alert victims sooner after their identities have been stolen. In other words, once it is already too late for those affected by the breach.

Even worse, many of these third-party services ask users to disclose to them even more personal information than was leaked in the original breach—like passport, bank account and phone numbers or driver’s license information.

A credit freeze—which the state legislature gave Californians the right to utilize in 2004— costs only $5, compared with between $120 and $360 per person, per year for identity theft protection services. And, unlike identity theft protection products, a freeze will actually prevent an identity thief from opening a new line of credit under the name of the potential victim. Moreover, since the adverse effects of a stolen identity may take months or years to surface, a credit freeze will continue to protect potential victims long after the proposed twelve months of ID theft protection services have expired.

The last time Assemblymember Dababneh introduced this bill, in 2015, a committee analysis found that his plan would cost taxpayers $12-$36 million per every 100,000 people at risk from a data breach. In reality, a major data breach could easily affect several million people, which would require the state to pay up to $1 billion to companies whose products do not actually prevent identity theft.

Mandating ID theft protection services is corporate welfare disguised as consumer protection. Given the potential cost to taxpayers and the state, combined with the proven ineffectiveness of the proposed solution, Consumer Action recommends a NO vote on AB 241, unless it substitutes credit freezes for the ineffective and more expensive ID theft protection products as the proposed remedy.

To write to your lawmaker about this issue, use our California Action Tools. Click here.




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