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In 2005 the Senate failed to pass federal
bill 5418, which would have made credit freezes available to
all U.S. residents.
ID theft victims and advocates of credit freezes say
this type of security wouldn't be necessary if companies were more
careful in their extension of credit and data.
Hendricks says that instead of being more responsible in verifying
identities and checking for fraud, credit reporting agencies create
products that require consumers to pay to monitor their credit files.
Caplovitz agrees.
"Credit reporting agencies are essentially making money off
of consumers by creating products to sell like ID-theft and fraud-monitoring
systems instead of eliminating the problem," she says.
David Rubinger, vice president of communications at Equifax, says
that credit reporting bureaus were not initially set up to monitor
consumer accounts for ID theft or fraud. "The bureaus were
simply started in an effort to scan consumers for creditworthiness."
But the question remains that if these agencies collect and sell
our data and rightfully own our financial information, whose job
is it to protect the information?
Kelly says that consumers should place a stronger importance on
watching out for their own credit and take advantage of state laws,
such as ones allowing credit freezes, if they can.
"It amazes me that such a small percentage of California residents
take advantage of their state's credit freeze law, since the service
was the first of its kind and has been available since Jan. 1, 2003,"
he says.
Kelly says consumers cannot expect the credit reporting agencies
to look out for consumers' best interests; the agencies are looking
out for their own interests.
He does, however, feel that credit bureaus will start to place
a stronger emphasis on ID theft and fraud monitoring, but with a
cost to the consumer.
Advocates strongly argue that companies that regularly fail to
secure consumers' credit files should not be allowed to turn around
and charge the consumers to protect themselves.
According to Hoofnagle, who has testified before Congress about
identity theft, the credit-granting systems are so flawed that the
only way to fix them is to give consumers a freeze.
As of Aug. 2, 2006, 25
states have credit freezes laws on their books.
Nineteen of the 25 states allow all consumers to place credit freezes
on their credit reports; Illinois will follow suit beginning January
1, 2007. In six of the states, you can only place a credit freeze
on your file if you have been the victim of ID theft and have a
police report or security breach notification to prove it.
The cost of a security freeze varies from state to state. The cost
to thaw a credit freeze also varies from state to state. However,
most states do offer the freeze free of charge if you can prove
you have been victimized by an identity thief.
To place a credit freeze on your file, you must mail, send a secure
e-mail or call in the following information to at least one of the
three
major national credit bureaus, Experian, TransUnion or Equifax:
- Full name: First name, middle name, last name, Jr., etc.
- Current home address and addresses for past two years, Social
Security number and date of birth
- Payment by check, money order or credit card. You will be asked
to verify the name, account number and expiration date on the
credit card.
- Copy of driver's license, military ID card or other government-issued
ID card
- Copy of utility bill, bank or insurance statement
Costs vary from state to state, but imposing a freeze will run
anywhere from zero to $20. Lifting it can come free or cost up to
$18.
Credit bureaus must place a freeze no later than five business
days after receiving your written or telephone request, or three
business days after recieving your e-mail request. Each of the credit
bureaus will send you a personal identification number, or PIN.
You will also get instructions on how to lift the freeze. Each
state regulates their credit freeze laws differently, so check with
your state's attorney general's office.
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