Final answer:
It is false that running a credit check on a customer is usually illegal; it is legal when done with proper authorization and for a permissible purpose. Unauthorized credit checks can lead to identity theft, which is why consumers should safeguard their information and monitor their credit history.
Step-by-step explanation:
The statement that running a credit check on a customer is usually illegal is false. Businesses can legally perform credit checks on individuals, but they must have a permissible purpose under the law, such as evaluation for creditworthiness, employment, rental applications, or with the explicit consent of the individual whose credit is being checked. This practice is regulated by various laws, including the Fair Credit Reporting Act (FCRA), which aims to ensure that credit information is handled correctly to protect consumers from mistreatment and identity theft.
However, unauthorized credit checks can lead to true-name fraud, which is a form of identity theft where personal identification and credit information are used without permission. Consumers can protect themselves by providing only the minimum necessary personal information, inquiring about how their data is used, understanding who has access to it, and by monitoring their credit history regularly to identify any possible fraudulent activities.