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Credit Bureaus Offer Customers Security Freezes

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By MICHELLE SINGLETARY Washington Post Writer's Group

Published: November 25, 2007

Just as the holiday shopping rush begins, the three major credit bureaus have decided they will provide consumers with a powerful tool to protect themselves from identity theft.

Equifax, Experian and Trans-

Union now offer consumers nationwide the option of freezing their credit reports.

A security freeze is so much better than a "fraud alert," which is what consumers are typically advised to do when they are either victims of identity theft or think their information has been compromised.

A fraud alert simply tells potential lenders they need to take extra care and certain steps before granting credit. The alert doesn't block access to your files, so it's not foolproof.

With a security freeze, lenders and businesses cannot get access to your credit files or your credit scores without your authorization. This means they aren't likely to issue new credit. This greatly reduces the chance that a thief will be able to get credit in your name and damage your credit profile.

Laws Vary By State

Until now, if you wanted to freeze your credit reports, you had to live in a state where the practice was allowed. Laws in 39 states and the District of Columbia have given consumers that option. However, four of those states - Arkansas, Kansas, Mississippi and South Dakota - only allowed a security freeze if a consumer was the victim of identity theft, according to Consumers Union, which has been following the issue and tracking the introduction and passing of security freeze legislation.

Florida's law went into effect in 2006. There are no fees for ages 65 and older or for victims of identity theft (with an investigative report). For others, there is a $10 fee to place, temporarily lift or remove a freeze.

For details on security freeze laws in all states, go to www

.financialprivacynow.org. Consumers Union has compiled a detailed list of each state's law, including when and how you can lift the freeze. The site also provides direct links to the three credit bureaus' security freeze information. Check with each bureau when placing a security freeze to make sure you are sending the right information.

To implement a freeze, you will have to send a certified letter to each of the three major credit bureaus. When applying for a security freeze, you get a personal identification number or password to lift the freeze from your file. The security freeze will remain in place until you request that it be permanently removed or temporarily lifted for a specific time or for a particular creditor or company.

Experian enables consumers to lift the freeze within 15 minutes by making a request online or by phone. Equifax and TransUnion allow consumers to lift the freeze by phone or by mail, but the request can take up to three days from the date of receipt.

Also be aware that a freeze generally does not apply to existing accounts. Existing creditors or affiliate companies can still access your files. A freeze also doesn't prevent companies from peeking at your credit files to prescreen you for additional credit.

Changes Proposed
Consumers Union is pushing to get the credit bureaus to charge all consumers no more than $5 to initiate and temporarily lift a security freeze and no fee to remove the safeguard.

Considering the recent spate of lost and stolen data on millions of consumers, Congress needs to mandate that everyone be allowed to initiate a security freeze at no charge. After all, we know identity theft is a huge problem. Various private and government surveys find that consumers can spend hundreds of hours and dollars trying to undo what an identity theft has done. Making this protection free could save everybody - consumers, companies and law enforcement officials - a lot of money and aggravation.

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