Thursday, October 4, 2007
More Affordable and Easier to Use
WASHINGTON, D.C. — By November 1, consumers in all 50 states will be able to freeze access to their credit files at all three major credit bureaus to prevent identity thieves from opening fraudulent accounts in their names. All three major credit bureaus have announced that they will make “security freeze” protection available in the eleven states that have not passed laws requiring it or that have limited this protection to identity theft victims.
Thirty-nine states and the District of Columbia have enacted laws requiring the credit bureaus to enable consumers to protect their credit files with a security freeze. The eleven states that have not adopted security freeze laws are Alabama, Alaska, Arizona, Georgia, Idaho, Iowa, Michigan, Missouri, Ohio, South Carolina, and Virginia.
Four states, Arkansas, Kansas, Mississippi, and South Dakota, have security freeze laws limited to identity theft victims. The plans announced by TransUnion, Equifax, and Experian make this protection available to all consumers in these states, even if they haven’t had their identities stolen.
“All three credit bureaus should be commended for extending the security freeze to those states that don’t already require this identity theft safeguard,” said Jeannine Kenney, Senior Policy Analyst with Consumers Union, the nonprofit publisher of Consumer Reports. “But consumers deserve a more affordable, easier to use security freeze to stop crooks from opening fraudulent accounts in their names. Lawmakers should require the credit bureaus to lower their fees and make the security freeze more consumer-friendly.”
TransUnion was the first major credit bureau to announce its intention to extend the security freeze nationwide, which it will begin on October 15. Experian announced today that it will make the freeze available in all 50 states starting on November 1. Equifax has said that it will do so by the end of October.
In one-third of the estimated 10 million cases of identity theft each year, crooks use stolen personal information like Social Security numbers to open new accounts in their victim’s name. A security freeze gives consumers the choice to “freeze” or lock access to their credit file against anyone trying to open up a new account or to get new credit in their name.
When a security freeze is in place at all three major credit bureaus, an identity thief cannot open a new account because the potential creditor or seller of services will not be able to check the credit file. When the consumer is applying for credit, he or she can lift the freeze temporarily using a PIN so legitimate applications for credit or services can be processed.
TransUnion and Experian announced that they will provide the security freeze at no charge to identity theft victims and charge non-victims $10 to initiate the freeze and $10 to lift it temporarily or remove it altogether. Equifax has not yet announced the fees it will charge for the security freeze for consumers living in states that don’t yet require it.
However, the credit bureaus must still offer the freeze at a lower cost and more favorable terms where required by state law. Lower fees are mandated by security freeze laws in the District of Columbia, Hawaii, Indiana (no fees allowed), Louisiana, Maryland, Massachusetts, Minnesota, Montana, New Jersey, New Mexico, New York, North Dakota, Tennessee, Vermont, and West Virginia. The states with the most consumer-friendly security freeze laws typically charge $5 or less to initiate the protection.
In letters sent to TransUnion, Equifax, and Experian, Consumers Union joined other consumer groups in urging all three credit bureaus to adopt better terms for consumers, including:
• charge consumers no more than $5 to initiate and temporarily lift the security freeze and no fee to remove the safeguard altogether;
• allow consumers to initiate the security freeze by regular mail, phone or through a secure electronic method; and
• allow consumers to lift, or thaw, the freeze within 15 minutes at no additional fee. A number of states have passed laws requiring that a 15-minute “quick thaw” be available by September 2008.
“The credit bureaus obviously have the technical ability to place and lift a security freeze instantly,” said Kenney. “There is no reason for them to wait until the law requires them to do so. All three credit bureaus should make it fast, affordable, and easy for consumers nationwide to take advantage of this important identity theft safeguard.”
More information about existing state security freeze laws can be found at: http://www.ConsumersUnion.org/SecurityFreeze.htm.
For copies of the letters sent to the three credit bureaus by Consumers Union, AARP, Consumer Action, Consumer Federation of America, Privacy Rights Clearinghouse, and World Privacy Forum, see:
Consumer group letter to Equifax: http://www.consumersunion.org/pdf/Equifax.pdf
Consumer group letter to Experian: http://www.consumersunion.org/pdf/Experian.pdf
Consumer group letter to TransUnion: http://www.consumersunion.org/pdf/TransUnion.pdf
Jeannine Kenney: 202-238-9249
Michelle Jun or Michael McCauley: 415-431-6747