A credit freeze isn't a silver bullet you can use to take out identity theft.
The shotgun approach remains the best weapon to keep ID thieves at bay, consumer advocates say.
So don't be lulled into a false sense of security by new credit bureau services that allow you to freeze your credit files.
This week, first Transunion, then Equifax, bowing to persistent consumer pressure, announced they would offer credit freezes for customers in all 50 states.
With rollouts scheduled for October, and the hope that Experian will follow suit, credit freezes lock, or freeze access to a consumer's credit report and credit score. Without that information, lenders typically will not issue new credit.
When you are ready to resume credit use, use a personal identification number (PIN) to unlock access to the credit file.
Consumers Union says 36 states and Washington, D.C. previously enacted credit freeze laws promoted by CU and other groups.
Generally state laws allow credit bureau's to charge up to $10 for placing or lifting a freeze for those who are not ID theft victims, but the service is free for ID theft victims. Fewer states mandate free freezes and thaws, no matter the consumer's status.
Equifax hasn't outlined it's service but Transunion plans a similar tiered charge for non-victims and victims. It will also add a credit freeze service at no additional charge to those who pay for its existing $14.95 monthly credit monitoring service.
Consumer advocates generally applaud credit freezes, but point out that a freeze doesn't make you invulnerable to ID theft.
"Whether you do it yourself or pay another, placing a credit freeze on your credit record does not make you bulletproof or invisible to identity thieves. The credit freeze is only one useful tool in a set available to most consumers to lower the risk of identity theft and it should be employed only in combination with other proven means of dealing with the entire spectrum of identity theft and identity fraud," said Yan Ross, project manager for the Institute of Consumer Financial Education (ICFE).
Government and private studies reveal ID thieves are more likely to follow a paper trail of discarded documents that aren't properly shredded than they are to hack into your credit file.
A large percentage of ID theft begins with stealing a wallet or purse, mailbox theft and other access to tangible materials that contain personal information.
ICFE also says a significant portion of reported identity theft cases never show up on credit reports, but appear as employment fraud, medical benefit fraud, non-financial criminal usage, and government benefit fraud.
Credit freezes are useful, but more so when they are used with additional ID theft prevention strategies outlined on the Federal Trade Commission's Identity Theft Site and elsewhere.
For example:
Learn about your credit, ID theft and other related consumer rights detailed in provisions of the Fair Credit Reporting Act and it's major overhaul, The Fair and Accurate Credit Transactions Act.
You can keep tabs on your credit report for free, at least three times a year and more often, say, if you are turned down for credit. Get your free credit report from the only federally-sanctioned service at AnnualCreditReport.com. Get one report from Equifax now, one from Experian in four months and one from Transunion four months later to keep a year long tab on your files.
Look it over and report any errors, omissions or other anomalies.
- You can pay a service to monitor your credit, but beware of fraud, additional fee-based services and services promised but not delivered. Regularly obtaining your own credit report and following the steps below could be all you need.
- Turn off the paper trail. Sign up for online account statements and bill payments, preferably through a single trusted provider such as a financial institution or portal, where payment information, passwords, settings and monitoring can be consolidated. Choose services with a no-liability guarantee of payment, on an easy-to-use site with extended-hours customer service. Likewise sign up for automatic payroll deposits, automatic bill payments and other automatic transfers of money.
- Go digital with existing accounts and discontinue paper statements. If you print from your online account, safely store copies, and use a confetti shredder to discard documents by reducing them to tiny bits of paper.
- Don't be a technophobe. Gain confidence in online finance management by test-using a bill payment service to pay yourself $1 and see what happens. Also use hard-to-guess unique passwords, based on information only you know, change them regularly and record them in a safe place. Include e-mail based account "alerts" you can customize with triggers based on your spending habits, but also check online accounts weekly.
- Don't discard a computer without fully erasing all personal data by zeroing out or fully wiping all personal data to disallow data recovery.
- Filter out and ignore spam, unknown online merchants and fraud-heavy online areas like adult websites. Don't respond to email that suggests you click a link in the email to sign on to update information. Log onto your site through its known URL address.
- Use a secure mailbox at home and at work for paper mail. Retrieve paper mail promptly after delivery. Never place outgoing checks in your home mailbox. Never leave personal information, say, your return address on an envelope addressed to your bank or other account in plain view, say, in your car or on your desktop at work.
- Never give out your Social Security number, driver's license, passwords or other account numbers or private information unless you initiate the call or transaction.
- Know in advance what to do with each account if fraud is detected. Photocopy or scan into your computer images of the contents of your wallet or purse in case of theft. If fraud is detected, contact credit bureaus, creditors and other relevant parties and take advantage of all recourse and protection provisions of federal and state law.
- Add your name to federal and state Do Not Call registries, and direct marketing opt-out lists. If you are already on the lists, be sure your opt out is up to date.
The federal Do Not Call Registry, for example, was created in 2003 and blocked most solicitous calls for those who registered, but only for five years. with each registration. The first wave of registrations is due to expire in 2008.
- If you are an ID theft victim you can also, for free, call anyone of the three credit bureaus and have a fraud alert placed on your account to prevent future infractions as you sort out the mess. Contact one bureau to place a fraud alert on your credit report and that company is required to notify they other two so that they too place an alert on their versions of your report.
Published: September 28, 2007
Use of this article without permission is a violation of federal copyright laws.
 Broderick Perkins parlayed a career in old-school journalism into a
contemporary digital news service that really hits home.
The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services.
The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home.
Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News.
Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake.
He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications.
In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com. |
