CoPIRG is working to increase corporate accountability after the Enron, Tyco and WorldCom scandals revealed the extent of corporate corruption.

In 2005, there were 1,107 financial restatements by U.S. companies, where the company was forced to adjust inflated earnings. On average, a stock loses almost 24 percent of its value when a restatement is announced.

These restatements call into question the credibility of accounting practices, and erode the confidence of over 85 million Americans who invest in the stock market to the tune of $7 trillion.

In 2003 CoPIRG advocated the expansion of the Colorado State Board of Accountancy (CSBA), which oversees corporate finances for investors.

CoPIRG is looking to further expand the CSBA to prevent corporations from scamming investors. Suggested reforms include increasing funding for the board, increasing the ethics training for all accountants and making financial subpoenas easier to secure

Security Breach Legislation Advances

On March 14, the state Senate committee passed a measure that requires companies to inform consumers of data breaches of their personal information.

This measure complements a CoPIRG-backed law passed last year. Starting this July consumers will be able to put a freeze on their credit information, preventing identity thieves from using credit information to open a new account under an assumed name.

“Identity theft occurs when thieves steal Social Security numbers or other personal data and use the information to take funds by opening credit card accounts, renting homes or obtaining loans,” said CoPIRG Director Rex Wilmouth.

By letting consumers know when information is leaked and giving them the power to freeze their accounts, identity theft is stopped before it becomes a problem.

Stopping Unfair Credit Scoring

CoPIRG is advocating a ban on using credit scores to set insurance rates.

Credit bureaus use computer programs to set a credit score for each customer. These scores, which CoPIRG studies have shown are riddled with errors, are then used by insurance companies to set insurance premiums.

Good financial management practices like consolidating debt to a lower interest credit card or using one credit card to take advantage of frequent flier miles can lower an individual’s credit score. While the insurance companies have been unable to explain what connection a credit score has to liability, they continue to use the score to set insurance rates, and even deny coverage.