Call on Consumer Financial Protection Bureau to oversee how credit bureaus work with consumers to fix errors in credit reports

Bethpage, NY—Today, Congressman Steve Israel (D-Huntington) and Nassau County District Attorney Kathleen Rice offered tips to keep consumers safe during tax season, in light of sharp increases in credit report errors and tax identity theft.  According to a recent study conducted, one in four had at least one potentially material error. Also, in the first nine months of 2012 alone, the IRS identified almost 642,000 incidents of tax identity theft.

Rep. Israel said, “The prevalence of credit report errors and tax identity theft is staggering. While many believe that it could never happen to them, the statistics show otherwise. Today, DA Rice and I are reminding people to be aware and take steps to reduce your risk. I am also calling on the Consumer Financial Protection Bureau to protect the people they serve by ensuring credit bureaus work with consumers to fix errors in their credit reports.”

DA Rice said, “In Nassau County and across the county, con artists are harvesting personal information from a variety of sources to steal tax refunds.  To avoid becoming a victim, it’s essential that people safeguard their personal information and regularly check their credit reports.  My office is dedicating significant resources to investigating and prosecuting these important cases, and I applaud Congressman Israel for his work to fight tax identity fraud and to protect the integrity of consumers’ credit reports.”

Credit report errors have been rising steadily, according to a recent study conducted by the Federal Trade Commission. Twenty-six percent of people in the study, representing as many as 40 million people in the United States, had at least one potentially material error and 5.2 percent of study participants had errors which, once corrected, resulted in an increased credit score high enough to decrease their credit risk and make them more likely to receive better loans. However, getting these errors corrected has proven difficult for consumers. Israel is calling on the Consumer Financial Protection Bureau to oversee how credit bureaus work with consumers to fix errors in their credit reports.

In addition, there has been a significant increase in tax identity theft. A report issued by the Treasury Inspector General for Tax Administration estimated that the IRS could issue $21 billion in fraudulent tax refunds over the next five years. According to the IRS, identity thieves use a taxpayer's identity to fraudulently file a tax return and claim the victim’s refund. Legitimate taxpayers find out that something is wrong when they go to file their return only to discover that a return has already been filed using the same social security number. IRS officials suggest filing tax returns as early as possible to make it harder for a thief to steal your identity and file a tax return.

For tips on what to do if you find an error in your credit report, click here.

For tips on how to prevent identity theft, especially as you file your taxes, click here.