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Security freezes on credit files are free starting today

September 21, 2018

Security freezes on credit files are free starting today

CLEVELAND, Ohio -- In a change consumer advocates have been pushing for years, people nationwide will be able to freeze their credit history files for free starting today.

Freezing a credit file protects people from new credit cards or loans being opened in their name by an identity thief, since no reputable bank will open an account without checking the person’s credit history.

“It’s about time that the credit bureaus stopped charging us for the right to control our own information.” said Mike Litt, consumer campaign director of the U.S. Public Interest Research Group in Washington, D.C.

Until today, consumers had to pay for a freeze -- generally $5 to $10 to each of the three credit bureaus. It cost the same to temporarily remove the freeze if you’re applying for credit. The fees were set by states; a handful of states prohibited the bureaus from charging consumers.

Free freezes for all is part of a larger federal law passed earlier this year.

Consumer advocates say everyone should consider freezing his credit files in this era of rampant fraud and identity theft. Freezing credit files with all three bureaus should take no more than a half-hour by phone. (See box.)

The law allows the bureaus to also set up a method so consumers can make their requests online, if they prefer. However, even the most computer savvy have reported problems navigating the bureaus’ websites in the past, primarily because they often steer people toward other options that aren’t freezes, or trick them into paying for extra services they don’t want or need.

Credit freezes won’t block all inquiries. Still allowed will be credit inquiries from: Existing creditors; insurance underwriters; prospective employers or landlords; any entity providing a credit monitoring service or something similar that the consumer has subscribed to; debt collectors, courts or government officials acting on a court order; and child support agencies.

The law requires the bureaus to remove a freeze or temporarily “thaw” it at the consumer’s request within one hour if the request is made through the toll-free dedicated phone number or online. If the request is made by mail, the freeze must be removed or thawed within three business days.

However, experts from Bankrate.com urge people not to wait until the last hour before applying for a loan or credit card. Consider thawing your file a day or two ahead of time, and allow the thaw to last perhaps one week, just in case your application for the loan or card isn’t processed right away.

The law also allows parents to freeze the credit files for their children under age 16. This is very important, say executives at Fifth Third Bank. The bank, citing a study from Javelin Strategy, noted that more than 1 million children were victims of identity theft last year. About two-thirds were 7 years old or younger.

Consumers will have the option of putting a free fraud alert on their file, instead of freezing it. In theory, businesses would be required to take steps to verify your identity before opening a new account in your name. But the law doesn’t say what those steps could be. Is it asking for your date of birth and the spelling of your middle name? Is it asking for ID (not likely if the account application is online)? The law also doesn’t say what the consequences are for a business that doesn’t verify a person’s identity.

A fraud alert would be better than nothing, said Litt of U.S. PIRG, but added, “We urge people to get the freeze.” A normal fraud alert would last one year. Victims of identity theft are entitled to seven-year fraud alerts.

The Federal Trade Commission last year received nearly 400,000 complaints about identity theft, often involving credit cards or fraudulent tax returns. About 88 percent of cases of fraud involve existing accounts.

TO GET A SECURITY FREEZE:

By phone:

Equifax 800-685-1111 (Press 3 for a freeze)

TransUnion 888-909-8872 (Press 3 for a freeze)

Experian 888-397-3742 (You have to enter your SSN, ZIP code and date of birth at  the very beginning. Then it’s option 1 for fraud issues, then option 2 to order a freeze.)

Online (do not give out your credit or debit card number or any bank information):

https://www.transunion.com/credit-freeze

https://www.equifax.com/personal/credit-report-services/

https://www.experian.com/freeze/center.html#content-01

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