— So far this year, more than 100 data breaches have
resulted in an estimated 153 million financial records
being stolen — hitting big names such as Experian,
T-Mobile, Anthem and U.S. government personnel records
— with most of the victims being offered free credit
monitoring services as a check against ID theft.
a new report by the Washington-based consumer group U.S.
PIRG says credit monitoring isn’t nearly enough. The
group is urging all consumers to consider freezing their
credit reports as the only way to stop ID thieves from
taking out loans, credit cards and other credit accounts
in victims’ names.
your personal information has been stolen or not, your
best protection against someone opening new credit
accounts in your name is the security freeze," said
Mike Litt, consumer program advocate at U.S. PIRG.
"Credit monitoring services may tell you (about a
fraudulent account) but only after you’ve been
a freeze is in place, credit bureaus are prevented from
releasing a file to potential creditors without the
consumer’s permission. Because most businesses won’t
open credit accounts without checking a consumer’s
credit history, ID thieves are locked out.
are drawbacks to consider, including fees, which vary by
state; some limitations; and the potential for delays
when consumers legitimately want to apply for credit.
People must lift freezes if they want to apply for
mortgages, car loans, credit cards or other type of
thaw can be activated online or by phone using a
personal identification number and choosing the number
of days that the thaw applies. It can be a general thaw
or apply only to a specific creditor.
is no fee to permanently lift a freeze, which
automatically expires in seven years.
of ID theft who provide a police report can freeze and
thaw their files at no charge, while people 65 and older
can initiate a freeze or free but must pay $10 for a
the broadest protection, experts recommend that
consumers freeze their credit reports with all three
main credit bureaus — Equifax, Experian and TransUnion
— because a freeze request with one doesn’t extend
to the others. Experian said it froze 433,558 files
through October this year, up from 160,639 in all of
consumer applying for credit who wants to temporarily
lift a freeze should find out which credit bureau the
lender is using to assess creditworthiness and request a
thaw from that particular bureau.
most cases, a report can be thawed within 15 minutes.
But since the law allows credit bureaus up to three days
to lift a freeze, shoppers could be blocked from getting
instant store credit — the kind that promises a
discount of 10 percent or more for signing up for a
credit card at the register.
also could interfere with other products and services
that may require a credit check, such as getting
insurance, renting an apartment, hooking up to a utility
or opening a cell phone account.
U.S. PIRG report noted that neither credit monitoring
nor a security freeze can detect or prevent unauthorized
use of existing credit accounts or other types of fraud
or identity theft such as theft of tax refunds or
medical services. Many banks and credit card companies
have mechanisms in place to detect existing account
fraud and remove unauthorized purchases.
report contended that paid credit monitoring services,
which typically cost from around $10 to $20 a month, are
not worth the expense because consumers can essentially
monitor their own reports free. Federal law requires
each of the main credit bureaus to provide consumers
with a free credit report once a year.
acknowledged that a credit monitoring service might
detect theft faster than consumers could on their own,
depending on when consumers happen to check their
victims of data breaches, an alternative to a credit
freeze is to place fraud alerts on credit reports. The
alerts are free but must be renewed every 90 days.
Victims of identity theft can sign up for extended fraud
alerts that last seven years.
fraud alert lets creditors know that they should take
special precautions before extending credit. An alert
with one of the three main credit bureaus is
automatically extended to the other two.
are weaker than a freeze because creditors aren’t
legally bound to abide by an alert.
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