2012-07-13 / Columnists

Your Life And Privacy

Freezing Identify Theft
By Gille Ann Rabbin, Esq., CIPP/US

Want to wave a magic wand and be protected from identity theft? Magic won’t work, but there is a tool you can use to avoid one type of identity theft. It’s called a “Security Freeze” (or “Credit Freeze”), and it helps prevent “New Credit Account” theft.

Using your personal information that you don’t even know he or she has, an identity thief can open a new credit card account, set up utility service, or rent an apartment in your good name. This is called New Credit Account theft.

You generally don’t receive the bills because they are sent to a false address. They are never paid. By the time you find out, your credit is ruined. The identity thief is able to do this because a prospective creditor – for example, an issuing credit card company – bases its decision to grant credit on a review of your good credit history, which is on file with the three nationwide credit reporting agencies, Experian, TransUnion, and Equifax (the “Big Three”).

A Security Freeze is placed in your credit file at each of the Big Three. It stops creditors (including creditors acting pursuant to legitimate requests) from reviewing your files, unless you authorize the agencies to allow access. To do this you’ll need to “thaw” (temporarily lift) your Freeze. Generally, creditors will not issue credit unless they’ve reviewed your credit history.

A Security Freeze can be inconvenient if you will be applying for new credit, like a mortgage or rental housing, or for employment entailing a background check. It may also prevent you from taking advantage of instant credit offers.

The inconvenience is worth it if you are a victim of identity theft, you suspect you may be, or you’re anxious about becoming a victim and want peace of mind. However, you will need to plan ahead before you seek new credit to give the credit agencies time to process your thaw. To obtain a Security Freeze, contact each of the Big Three credit reporting agencies and make a separate Freeze at each one. You can place a Security Freeze online, by mail or telephone. Specifics can be found on the Big Three’s websites: www.transunion.com; www.experian.com; www.equifax.com. Each agency’s procedure is slightly different.

After you place a Security Freeze, the credit bureaus will contact you in writing to confirm that the Freeze has been activated and provide you with a personal identification number to use when you want to thaw or permanently remove your Freeze.

There is generally a small fee set by state law for placing or lifting a Security Freeze, but the fee may be waived for certain groups. New York waives the fees for identity theft victims. For nonvictims, initial placement and permanent removal are free; thaws cost $5.

While a Security Freeze should prevent New Credit Account theft, it will not prevent identity thieves from using existing accounts. For the past 12 years, identity theft has topped the Federal Trade Commission’s list of consumer complaints. Regularly review credit reports and stay vigilant!

For more information, visit the credit agencies’ websites.

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