Af­ter credit freezes, de­lays are likely for those who fi­nance iPhones and other items.

De­lays and fees may greet those who lock down their records

Houston Chronicle - - BUSINESS - By Ken Sweet and Michael Liedtke

NEW YORK — Ap­ple fans who froze their credit af­ter the Equifax data breach may end up with an­other has­sle on their hands if they try to get one of the new iPhones that can cost more than $1,000. Peo­ple who rushed to lock down their credit and want to make any other big pur­chases may find the same in­con­ve­niences.

Since Equifax dis­closed that 143 mil­lion Amer­i­cans had their So­cial Se­cu­rity num­bers and other per­sonal data hacked, ex­perts have en­cour­aged peo­ple who may af­fected to put in place what’s known as a credit freeze. That locks down a per­son’s credit from be­ing stolen by iden­tity thieves — but could also mean de­lays and more fees for Equifax vic­tims who want to fi­nance new phones.

You can un­freeze your credit be­fore a big pur­chase and freeze it again af­ter­ward. How long it will take and how much it costs vary state by state. Ex­perts say gen­er­ally it’s best to give the ma­jor credit bu­reaus — Tran­sUnion, Ex­pe­rian and Equifax — no­tice of sev­eral hours or even a few days be­fore you ap­ply for fi­nanc­ing. And peo­ple just get­ting used to the idea of freez­ing their credit could pay $3 to $10 for each ac­tion at each of the three bu­reaus.

Pay­ment plans are a grow­ing busi­ness for the ma­jor wire­less car­ri­ers, many of which no longer sub­si­dize a cus­tomer’s pur­chase, be­cause a monthly pay­ment makes an ex­pen­sive smart­phone more af­ford­able. And Ap­ple and the wire­less car­ri­ers of­ten need ac­cess to your credit re­port in or­der to ap­prove the sale of a new phone un­der a monthly plan.

“But if you are some­one who has frozen their credit record, you may sud­denly dis­cover that you can’t af­ford an iPhone X af­ter all,” said Pa­trick Moor­head, an in­dus­try an­a­lyst with Moor & In­sights.

Prov­i­dence, R.I.-based Cit­i­zens Fi­nan­cial Group, which runs the Ap­ple fi­nanc­ing pro­gram, said any new or ex­ist­ing cus­tomer who has a credit freeze on their in­for­ma­tion will be de­clined fi­nanc­ing. So they would have to un­freeze their credit, at least tem­po­rar­ily. Sprint, Ver­i­zon, T-Mo­bile and AT&T run credit checks with the agen­cies for new cus­tomers. Poli­cies vary for ex­ist­ing cus­tomers.

An­a­lysts say two-year fi­nanc­ing plans have be­come es­sen­tial to sell­ing high-end smart­phones. In­ter­na­tional Data Corp. an­a­lyst Ra­mon Lla­mas called them “crit­i­cal.” Moor­head ex­pects vir­tu­ally ev­ery­one in­ter­ested in the new iPhone X, which rolls out later this year, to use an in­stall­ment plan.

Ap­ple rolled out its pro­gram two years ago that lets cus­tomers up­grade to a new phone each year and di­vides the cost of the phone into a monthly pay­ment. Ap­ple doesn’t share de­tails on how many cus­tomers fi­nance their phones through Cit­i­zens/ Ap­ple in­stead of their car­ri­ers and de­clined to dis­close how many of its iPhones are fi­nanced.

For oth­ers, it’s clearly big busi­ness. AT&T sold 3.58 mil­lion smart­phones to cus­tomers un­der pay­ment plans last quar­ter, ac­cord­ing to its most re­cent fil­ing. Ver­i­zon cus­tomers fi­nanced $14.5 bil­lion in smart­phones un­der the com­pany’s pay­ment plan in the first six months of 2017. Roughly half its cus­tomers who pay cell­phone bills at the end of each month are on a pay­ment plan.

The Ver­i­zon and AT&T fig­ures in­clude sales of both iPhones and other smart­phones like Sam­sung, which has a larger global share of the mar­ket than Ap­ple. But iPhones gen­er­ally cost more than phones by other mak­ers — roughly $685 com­pared to the $340 av­er­age price of a Sam­sung phone — so an­a­lysts think a greater share of iPhone cus­tomers may fi­nance theirs.

Mar­cio Jose Sanchez / As­so­ci­ated Press

An­a­lysts say two-year fi­nanc­ing plans have be­come es­sen­tial to sell­ing high-end smart­phones, such as Ap­ple’s new iPhone X.

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