There's good news on the horizon for credit freezes.
Thanks to a new federal law that will go into effect by Sept. 21, all three credit bureaus will have to offer credit freezes and lifts for free. The costs vary by state. In Ohio, it costs us $5 per credit bureau to place or lift a freeze.
In the short term, only Equifax is offering free credit freezes and lifts. (TransUnion does not charge to lift freezes, but it does charge to place the freeze.) Equifax wasn't offering free credit freezes and lifts out of kindness. It is the credit bureau that had the massive data breach last September. More than 145.5 million people in the United States — or half the country — were affected by the breach.
An Equifax spokesman confirmed that the credit bureau, which had extended its free credit freeze and lifts through June 30, is now going to extend the free service until it becomes law in September.
This is all very good news — and long overdue.
“This is excellent news for consumers,” Eva Velasquez, president and CEO of the San Diego-based Identity Theft Resource Center, said in a recent phone interview. “It removes one more roadblock or barrier for people to take control of their identity and practice those good identity hygiene habits.”
Consumer advocates have long said it was not fair to make people pay for the right to protect their own financial identities.
“While it may seem this happened fast in the wake of the Equifax breach, I can assure you that advocates all over the country have been working on this for a long time,” she said. “This is a big win for consumers. It's about choices.”
A credit freeze is not necessarily for everyone, Velasquez said. Some people cite the inconvenience factor.
“I'll let them make that judgment call,” she said. “But if people want to take that proactive step, not being able to afford it should not be the reason. Whether people take advantage of this or not, they have the choice to do so and it's not based on economics.”
The delay in implementation of the law is partially to give the credit bureaus time to get their systems ready for the free credit freeze and lifts, said Susan Grant, director of consumer protection and privacy for the Washington, D.C.-based Consumer Federation of America.
But Grant said that her agency will be “watching carefully to see how they actually work and whether there are any unnecessary obstacles placed in consumers' way to either freeze their files or lift the freezes when they need them.”
Representatives for the three credit bureaus directed questions to the Consumer Data Industry Association (CDIA), or national industry trade organization.
CDIA President and CEO Francis Creighton said, “We are pleased to note the enactment of the Economic Growth, Regulatory Relief and Consumer Protection Act, which will help consumers by improving the economy and assisting in the fight against identity theft.”
Creighton said Equifax, Experian and TransUnion will be compliant by Sept. 21. The CDIA does not run the joint website used to provide the one free credit report per consumer per year (also a federal law), www.annualcreditreport.com, so Creighton could not answer whether consumers could get their free credit report and free credit freeze on the same site. Otherwise, consumers will need to go to all three bureaus' sites or contact the bureaus individually to place or lift the credit freezes when it becomes law.
What's a credit freeze?
Credit freezes are a proactive way for consumers to protect their financial identities, especially in light of the massive data breaches that are all around us.
The best analogy I can give is it is locking all of the doors to your house. You wouldn't go to sleep or leave your house with only your front door locked, but leave the side or back door unlocked, would you?
What a credit freeze does is lock your credit from everyone — including you — without the proper key. That means that if an identity thief wants to try to take your name to use your good credit, the creditors wouldn't be allowed to grant the thief credit without your permission.
It is easy to “lift” or “thaw” your freeze, but takes some planning. When you place your freeze, you establish a PIN number to use when you go online or call the credit bureau to temporarily or permanently lift your freeze.
For instance, when we bought a car last year, I found out which credit bureau's report would be checked and I lifted the freeze for a few days for $5.
Having a freeze does mean you can't get “instant” credit, unless you lift your freeze.
I know people use both the online and phone systems to place or lift their credit freezes.
I have found the online systems to be so easy and quick, compared to talking to an automated phone system.
Credit freezes do not affect your current credit, only when new credit is sought. So you can still use your current credit cards and accounts.
A few other pieces of the law that will benefit consumers include:
•?The current 90-day free fraud alert will move to a one-year free fraud alert. Some advocates say the fraud alert, which is a personal statement on your credit report saying you may be the victim of identity theft or a data breach and you want potential creditors to be wary of granting new credit, is worthwhile. Personally, I am not a fan of the fraud alerts because creditors may not see the statement and it doesn't prevent new credit.
•?The law also allows parents to freeze credit for a minor child up to age 16. Currently, credit bureaus say they don't knowingly have credit reports for minors and there are many hoops (paperwork) for parents to place a freeze. The law does not address children ages 16 to 18, and I still am advocating that parents should be able to freeze credit for those ages. It's not good to leave those kids — on the verge of adulthood — unprotected.
Here's how to contact the bureaus:
•?Equifax: 888-298-0045, Equifax Security Freeze, P.O. Box 105788, Atlanta, GA 30348-5788 or https://www.equifax.com/personal/contact-us
•?Experian: 888-397-3742, Experian Security Freeze, P.O. Box 9554, Allen, TX 75013 or https://www.experian.com/freeze/center.html.
•?TransUnion: 888-909-8872, TransUnion, P.O. Box 2000, Chester, PA 19016 or https://www.transunion.com/securityfreeze
Consumer columnist Betty Lin-Fisher can be reached at 330-996-3724 or firstname.lastname@example.org. Follow her @blinfisherABJ on Twitter or www.facebook.com/BettyLinFisherABJ and see all her stories at www.ohio.com/betty
Betty Lin-Fisher: Free credit freezes coming nationwide by Sept. 21
There's good news on the horizon for credit freezes.