Charles Dharapak, Associated Press Veterans Affairs Secretary Jim Nicholson holds up a "thumb drive" as he demonstrates how easily data can be transported as he testifies last week before the Senate Committee on Homeland Security and Governmental Affairs regarding the theft of personal data of 26.5 million veterans.

By Patricia Sabatini
Pittsburgh Post-Gazette In the wake of the data security breach this month exposing millions of U.S. veterans to the risk of identity theft, consumer advocates are urging state lawmakers to pass a bill that would allow Pennsylvanians to freeze their credit files.

The number of states enacting such laws has ballooned over the last year and a half following a number of high-profile thefts involving confidential financial data, such as birth dates and Social Security numbers, that ID thieves use to get loans and open credit card accounts in victims' names.

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The Department of Veterans Affairs on Monday acknowledged that burglars had stolen an electronic file containing personal data on as many as 26 million veterans from an employee's home. The veterans and their families are being told to monitor their credit reports, bank accounts and credit card bills for suspicious transactions.

So far, nearly 20 states have passed credit report freeze laws to help consumers combat ID theft. In a few of those states, only victims of ID theft are able to request a freeze, but most of the laws apply to all consumers.

Freezing a credit file blocks access to credit reports that lenders and other creditors use to open new accounts. The freeze effectively would prevent a thief from getting credit in someone else's name.

"Security freezes allow consumers to decide which potential creditors get access to their credit files, preventing impostors from ruining their good names," said Jim Swoyer, Harrisburg-based advocate for the Pennsylvania Public Interest Research Group, or PennPirg for short.

PennPirg is pushing for passage of Senate Bill 180, which has been in committee since being introduced by Sen. Jake Corman, R-Centre County, early last year.

Under the bill, Pennsylvanians could request a freeze by certified mail. Credit bureaus, which include Equifax, Experian and TransUnion, would have five days to comply.

Consumers wanting to apply for credit could temporarily lift the freeze for a particular creditor or specific period of time using a personal ID or password. Credit bureaus would have up to three business days to comply.

The freeze wouldn't apply to government agencies and other parties, including law enforcement, the courts and creditors trying to collect bad debts.

Credit reporting bureaus would be allowed to charge up to $10 to initiate a freeze and up to $8 to temporarily lift it. There would be no charge for victims of ID theft, for people 62 or older, or for permanently removing a freeze.

"This is an important consumer protection that other states have. There is no reason Pennsylvania consumers can't enjoy the same benefits," said Sen. Corman's chief-of-staff, Don Houser. Mr. Houser said the senator was hoping for action on the bill soon.

Opponents of security freeze laws include retailers and credit card issuers who fear they'll lose business when consumers who have frozen their credit reports are unable to get instant credit.

Mr. Houser said the trade-off is worth it. "With the information age and more and more crimes being done over the computer using Social Security numbers, we need to give consumers the best tools we can to help protect themselves."