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Freeze out credit fraud

New IdentityTheft Scam

Not everyone will want to place a freeze on their credit information — at the minimum the step puts a new barrier between consumers and access to credit.

But thanks to a welcome change in federal law, requesting a freeze soon will be free for all Americans. This opens up this option as a consideration for millions of people who justifiably fret over what someone else could be doing with their personal information.

Credit fraud comes in many forms, but one of the most common types is “new account fraud” — someone who is not authorized opens a new account using your name, birth date, Social Security number and address.

This happens most often after the kinds of data breaches that have captured headlines in recent years. The information for millions of people has been put at risk in these cases.

Under current law, consumers are entitled to a 90-day renewable credit fraud alert to be placed on their account in the event their data has been exposed. An alert is a step below a credit freeze; it means the credit bureau has to verify your identity before releasing information about you.

The change recently passed by Congress and signed by President Trump will extend fraud alerts to a full year, rather than requiring quarterly renewals. This will help many people who simply want to know the credit bureau is checking before releasing their data.

Credit freezes provide an actual barrier to credit. A freeze means no one — including you — can access your credit information to open an account. This has repercussions: You may not receive credit offers you want to see. You will not be able to take out a loan or obtain a credit card unless you “thaw” the freeze.

Until now, the three credit bureaus — Equifax, TransUnion and Experian — have been allowed to charge for both credit freezes and thaws in nearly all states, including Missouri and Kansas. The only exception is people who already have been a victim of identity theft. The fees range from $2 to $10 per credit bureau.

The result, for a consumer wanting blanket protection across the three credit bureaus, is they have faced charges totaling as much as $30 to put a credit freeze in place. And then, when they want to thaw the freeze, they have had to pay more fees.

The new law waives fees for both freezes and thaws, whether temporary or permanent.

It’s helpful to understand how these fees came about in the first place. About 10 years ago, the credit bureaus agreed to advocates’ requests to allow credit freezes, according to CNN Money. But because the bureaus feared the impact of too many people leaving the credit marketplace, a fee was allowed as a compromise.

This is a reminder identity theft has become a much bigger concern over the last decade. Consumers want and need greater control over their personal data.

Source: on 2018-06-05 01:03:45

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