Credit Bureaus’ Little Secret: A Cheap Way to Foil ID Theft
Philadelphia Inquirer reporter John Timpane discovered that he was a victim of Identity Theft when a criminal filed a false tax return using his Social Security Number. After dealing with the IRS, FTC, multiple credit agencies and other organizations, he’s discovered a few tricks to help consumers foil Identity Theft.
Since the mid-2000s, there has been a relatively cheap, sometimes free way to combat new-account fraud: a security freeze. The trouble is, it doesn’t make any money for the credit-reporting agencies that trade in your personal data, so Experian, Equifax and TransUnion do little to publicize it. In essence, the bureaus are encouraging you to pay monthly fees for credit-monitoring and -alert services, so you’ll be quick to discover, after the fact, that you’ve been victimized. Meanwhile, they’re almost hiding a better alternative: By giving you control over who can obtain data from your credit report, a security freeze can block new-account fraud before it happens.
How do you impose a security freeze (also known as a credit freeze)? Because they were required by a series of state laws mostly enacted half a dozen years ago, the details vary. But according to the Consumer Financial Protection Bureau, 47 states plus the District of Columbia now authorize freezes, and the bureaus voluntarily offer the service to at least some residents of Alabama, Michigan and Missouri, the holdouts.
As a New Jersey resident, a consumer is entitled to a free “security freeze” – the name varies state to state – from each of the three major credit bureaus. A consumer might have to pay $5 for a temporary thaw if he wanted to give a particular creditor access to his credit file, or give any creditor access for the next week or two – say, if he knew he was about to go car shopping and wanted to obtain a variety of loan offers. Isn’t that a hassle, too? Perhaps, and that’s what the credit bureaus will warn you about if you choose to freeze your credit file. But for most people, shopping for more credit is hardly an everyday thing.
The New Jersey Department of Banking and Insurance explains Jersey’s procedures here – a consumer would have to make requests by certified mail, which adds a little extra cost. Pennsylvania allows each credit bureau to charge $10 to impose a freeze, but that fee is waived for victims of identity theft.
When it comes to financial security, our laws and rules sometimes seem to have it backwards. Armed with your name, address, and Social Security number, an imposter might find it easier to get $1,000 in “instant credit” in your name in the checkout line of Home Depot than you’d find it to get $200 – from your own bank account – at a nearby ATM.
Article source – read more here: Credit bureaus’ little secret: A cheap way to foil ID theft