Consumer groups laud change in wake of data breach
If your files are frozen, it prevents credit bureaus from releasing them without your permission. Because most businesses won’t extend credit without checking a borrower’s credit history, ID thieves are blocked from opening fraudulent accounts in your name.
The downside is that people with frozen files must use a personal identification number to temporarily lift, or “thaw,” their reports when applying for a credit card, mortgage, car loan, or other type of credit.
Now, at least that step will be free.
Another benefit of the new law covers fraud alerts, which are a less effective alternative to credit freezes. Fraud alerts let creditors know that they should take special precautions before extending credit, but they are not legally bound to do so.
Currently, fraud alerts — which are free — must be renewed every 90 days.
Under the new law, they must last for one year.
Because the new law covers all national consumer reporting agencies, Ms. Grant said she was pretty sure it also would apply to the National Consumer Telecom & Utilities Exchange, which specializes in reports about consumers’ telecom and utilities payment history.
Some consumer advocates have been recommending that people affected by the Equifax breach also request a security freeze at the exchange because of reports of fraudulent cell phone accounts opened in people’s names even though they had freezes at the big three bureaus.
The credit bureaus also have been offering credit “locks” as an alternative to security freezes, including free and pay versions. Consumer advocates recommend freezes over locks, however, because only freezes are governed by federal rules.
More information about ID theft and credit freezes is available from the Federal Trade Commission at www.consumer.ftc.gov/topics/identity-theft. To contact the big three credit bureaus to learn about freezing your files, visit www.experian.com/freeze/center.html; www.transunion.com/credit-freeze and www.freeze.equifax.com/Freeze/jsp/ SFF_PersonalIDInfo.jsp.