Freeze your credit, well in eight States anyway…….
In February, Maine became the twelfth State to pass legislation that allows consumers to freeze their credit information. This program has been floating under the radar for quite some time and I think that if more consumers were aware of it, they would be flocking in droves to sign up.
I know that I wrote eight States and reference Maine becoming the twelfth. There is a reason for this. But first, let me explain about the program. OK fine. For those of you that are impatient, 8 States allow any consumer to participate in freezing their account. The other 4 States and potentially on a National level, you must be a victim of identity theft before you can protect yourself in the future.
California was the first State to pass this type of law back in 2003. The vast majority of Californians have not signed on because they don’t know about it.
Here is the reason behind the law and how it works:
Nearly 10 million Americans fall victim each year to identity theft. Current statistics show that a victim will spend an average of 330 hours resolving problems as a result of identity theft and paid between $851 and $1378 in out of pocket expenses (excluding a median of $4000 per victim in lost wages in 2004).
Identity theft also costs U.S. businesses nearly $48 billion annually, and consumers an additional $5 billion per year.
A security freeze lets consumers stop thieves from getting credit in their names. A security freeze locks, or freezes, access to the consumer credit report and credit score. Without this information, a business will not issue new credit to a thief. When the consumer wants to get new credit, he or she uses a PIN to unlock access to the credit file.
“Freezing” your account would prevent anyone from opening new credit card accounts or taking out loans in your name without your knowledge/permission and gives you control over your personal financial information. I like it mainly because the bureaus can’t make any money off of my data without my permission.
To place a credit freeze on your file, you must mail (certified mail is suggested) the following information to at least one of the three bureaus (Experian, TransUnion or Equifax):
• Full name: First name, middle name, last name, Jr., etc.
• Current home address and addresses for past five years, Social Security number and birth date
• 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.
Costs vary from state to state, but imposing a freeze will run anywhere from zero to $10. Lifting it will run another $5 to $12.
Credit bureaus must place a freeze no later than five days after receiving your written request. After you send your letter asking for the freeze, 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.
The “usual suspects”: Of course the three credit Bureaus are up in arms over this law. It will cost us too much money they say..blah, blah, blah…tough.
If these agencies collect and sell our data and rightfully own our financial information, whose job is it to protect that information? It is obvious that they are more interested in making money than protecting someone’s financial information. The three credit reporting agencies oppose credit freezes because they think consumers’ credit information is their product to sell. They make money every time they sell your information to banks, mortgage brokers, car dealerships and other retailers. Of course they don’t want consumers to have control over their credit files; it takes away a huge revenue stream.
They argue that “fraud alerts” are available to anyone that has become a victim of identity theft. The bad thing is that you have to become a victim first. It is not a preventative measure and studies have shown that the bureaus ignore about 50% of these alerts and never notify the consumer when they have “in essence” sold your data to someone.
Of course, you could pay them to “monitor” your credit profile, for a fee of course. This allows you, I guess, to give them money so you can see each time they make money off of selling your account information to a creditor. It does not prevent fraud unless you watch your file constantly. Freezing your account does and it costs a whole lot less.
Now the sad news: What about the rest of you people that don’t live in these 8 States?
Well, the Senate passed a bill ESB 54168 in March 2005. Here is the House Amendment that was attached to it, and I am willing to bet that this will be in any law passed on a National level, unless we as the consumers start making our voices heard:
The Amendment reads: Only victims of identity theft, rather than all consumers (let’s say all Americans), may place a security freeze on their credit reports. No fee can be charged. The provision allowing consumers to remove their names from lists furnished for credit card solicitation is removed. The term “consumer credit reporting agency” is changed to “consumer reporting agency.”
Passed House: 66-30
I have provided information on the twelve States that currently have some type of freeze program available:
California
Applies to all consumers
Effective Jan. 1, 2003, subsequently amended to cap fees on non-ID theft victims
No fee for victims to place the freeze, others pay up to $10 per freeze Caps fee to lift freeze at $10 for temporary lifting for a time, $12 for temporary lift for one creditor
California Civil Code sections 1785.11.2-1785.11.6.
How to place your security freeze in California and a link to the text of the California statute, see: http://www.privacyprotection.ca.gov/sheets/cis10securityfreeze.htm
Colorado
SB 05-137
Applies to all consumers
Fees: No fee for first freeze; $10 to place a second freeze, $10 to lift, $12 for temporarily lift for one creditor
Signed June 1, 2005
Effective date: July 1, 2006
Text of statute: http://www.leg.state.co.us/Clics2005a/csl.nsf/fsbillcont3/349195C4D17F1A7787256F8E0001202B?Open&file=137_enr.pdf
For more information on the security freeze law in Colorado, see: http://www.ago.state.co.us/idtheft/securityfreeze.cfm
Connecticut
SB 650
Applies to all consumers
Fees: $10 to place, lift, or lift temporarily, $12 to life for one creditor
Effective date: Jan. 1, 2006
http://www.cga.ct.gov/2005/act/Pa/2005PA-00148-R00SB-00650-PA.htm
For more information on the security freeze law in Connecticut, see:
http://www.ct.gov/ag/cwp/view.asp?A=1949&Q=293270
Illinois
HB 1058
Victims of ID theft only, with a police report or a complaint to a law enforcement agency
No fees permitted
Effective date: Jan 1, 2006
http://www.ilga.gov/legislation/publicacts/fulltext.asp?Name=094-0074
Louisiana
Applies to all consumers
Fees: $10 to place, $8 to lift, no fees for ID theft victims or persons age 62 or older
Passed July 2004 Effective date: July 1, 2005
Louisiana Statutes Annotated § 9.3571(H) to (Y)
How to place your security freeze in Louisiana:
http://www.ag.state.la.us/calerts/alert0015.aspx
Maine
Applies to all consumers
Fees: No fees on ID theft victims who provide a police report. Others pay up to $10 to place, remove, temporarily suspend, or have PIN reissued, and $12 to lift for a specific creditor.
Effective date: Feb. 1, 2006.
For more information on statute: http://janus.state.me.us/legis/LawMakerWeb/externalsiteframe.asp?ID=280015326&LD=581&Type=1&SessionID=6
Nevada
Applies to all consumers
Fees: No for ID theft victims who submit a police report, for others $15 to place, $18 to lift, $20 to lift for one creditor
Effective date: October 1, 2005.
For more information on statute: http://www.leg.state.nv.us/73rd/bills/SB/SB80_EN.pdf
New Jersey
Applies to all consumers
Fees: No fee for initial freeze. Up to $5 to remove, temporarily lift or have PIN reissued. Consumers are also permitted to make such requests directly to consumer reporting agencies via secured electronic mail.
Effective date: January 1, 2006
Text of statute: http://www.njleg.state.nj.us/2004/Bills/S2000/1914_R1.PDF
For more information on the security freeze law in New Jersey, see:
http://www.state.nj.us/cgi-bin/governor/njnewsline/view_article.pl?id=2732
How to place your security freeze in New Jersey:
http://www.njdobi.org/creditfreeze.htm
North Carolina
Applies to all consumers
No fees for ID theft victims with valid report/complaint with law enforcement agency. Up to $10 to place, remove, temporarily suspend.
Effective date: December 1, 2005
For more information on statute:
http://www.ncga.state.nc.us/Sessions/2005/Bills/Senate/HTML/S1048v6.html
How to place your security freeze in North Carolina:
http://www.ncdoj.com/DocumentStreamerClient?directory=Publications&file=securityfreeze.pdf
Texas
Applies to identity theft victims with a police report
No fees
Placement at one CRA must be honored by all
Passed June 2003 Effective date: September 1, 2003
Texas Business & Commerce Code Ann. § 20.031 to 20.039
Text of statute (see Chapter 20, Section 031 - REQUESTING SECURITY ALERT from link below): http://www.capitol.state.tx.us/statutes/bc.toc.htm
Vermont
Applies to identity theft victims with a police report or a complaint to a law enforcement agency
No fees
Passed June 2004 Effective date: July 1, 2005
Vermont Statutes Annotated, Title 9, Sections 2480a to 2480j
Text of statute: http://www.leg.state.vt.us/docs/legdoc.cfm?URL=/docs/2004/acts/ACT155.HTM
How to place your security freeze in Vermont, see: http://www.atg.state.vt.us/display.php?smod=198
Washington
Applies to identity theft victims, including persons who receive a notice of a security breach of computerized personal information
No fees
Passed May 9, 2005, Effective date: July 24, 2005
Chapter 342, Laws of 2005, to be codified at Sec. 19.182 RCW.
Text of statute:
http://www.leg.wa.gov/pub/billinfo/2005-06/Htm/Bills/Session%20Law%202005/5418.SL.htm
How to place your security freeze in Washington, see:
http://www.atg.wa.gov/AskAG/AskAG_CreditFreeze_20051010.shtml
To learn more about your options and managing you debt, log onto www.debtreliefoptions.com.
Jon Noble
Staff writer
Debt Relief Options
asktheexperts@debtreliefoptions.com
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