Wednesday, September 19, 2007
Consumer groups call on Experian and Equifax to meet or exceed TransUnion‘s plan.
SAN FRANCISCO, CA – Starting on October 15, TransUnion will begin offering consumers in all 50 states the ability to freeze access to their credit files. Thirty-nine states and the District of Columbia have passed laws enabling consumers to request a security freeze. Consumers Union applauded TransUnion for making this safeguard available in the rest of the country and called on Equifax and Experian to do the same.
“A security freeze is a powerful tool that enables consumers to prevent identity thieves from damaging their credit records,” said Gail Hillebrand, Director of Consumers Union’s Financial Privacy Now campaign. “All consumers deserve the right to a low-cost security freeze that makes it easy to prevent crooks from opening fraudulent accounts.”
Every day, an average of 27,000 Americans have their identities stolen. In one-third of those cases, crooks use the information to open new accounts in their victim’s name. Armed with just your Social Security number, a thief can open fraudulent accounts and start charging away, leaving you with a damaged credit record, which may take years to repair.
A security freeze gives you the choice to “freeze” or lock access to your credit file against anyone trying to open up a new account or to get new credit in your name. When a security freeze is in place at all three major credit bureaus, an identity thief cannot open a new account in your name because the potential creditor or seller of services will not be able to check your credit. When you are applying for credit, you can lift the freeze temporarily using a PIN so legitimate applications for credit or services can be processed.
“For a security freeze to be effective to stop new account identity theft, it must be placed at each of the three major credit reporting agencies,” said Hillebrand. “That’s why it is so essential for Experian and Equifax to offer the freeze nationwide.”
TransUnion has announced that it will provide the security freeze at no charge to identity theft victims and charge non-victims $10 to initiate a freeze and $10 to lift it temporarily or remove it altogether. The states with the most consumer-friendly security freeze laws typically charge just $5 to initiate the protection. TransUnion has indicated that it will meet or exceed the requirements of those laws.
“TransUnion and the rest of the credit bureaus should follow the lead of the states with the best security freeze laws and provide this protection to all consumers for no more than $5,” said Hillebrand.
According to TransUnion, consumers can initiate the freeze by mail and lift it by mail or phone. At the same time, TransUnion is offering a much more expensive package that provides credit monitoring and a service called TrueCredit Lock that will enable consumers to instantly freeze and unfreeze their credit files online. The service is being offered for $14.95 per month or $179.40 per year. Consumers Union advises against paying a high, monthly fee for credit monitoring and the security freeze.
Beginning in September 2008, a number of states that have passed security freeze laws will require all three credit bureaus to enable consumers to lift the security freeze within 15 minutes of making an electronic request. Under these laws, the credit bureaus will have to comply with quicker security freeze lift requests without charging any additional fees.
“TransUnion and the other credit bureaus obviously have the technical ability to place and lift a security freeze instantly,” said Hillebrand. “All three credit bureaus should make it fast, affordable, and easy for consumers nationwide to take advantage of this important identity theft safeguard.”
The eleven states that have not adopted security freeze laws are Alabama, Alaska, Arizona, Georgia, Idaho, Iowa, Michigan, Missouri, Ohio, South Carolina, and Virginia. Arkansas, Kansas, Mississippi, and South Dakota have adopted security freeze laws that cover consumers once they have become victims of identity theft. More information about existing state security freeze laws can be found at: http://www.ConsumersUnion.org/SecurityFreeze.htm
Gail Hillebrand: 415-431-6747
Jeannine Kenney: 202-462-6262