Why You Should Think Twice About Freezing Your Credit

The recent Equifax data breach potentially put more than 143 million Americans’ sensitive personal information like social security numbers, birth dates, driver’s license numbers and more at risk.
With such a big hit, what if your information has been compromised? The knee-jerk reaction is to freeze your credit. But is that a good idea?
Gerri Detweiler, education director for Nav.com, where business owners can check and monitor their business and personal credit for free, offers her advice, “I encourage consumers not to rush blindly into placing a credit freeze. Here's why: Cost. If you are not a victim of identity theft (a data breach victim does not automatically qualify) it may cost you to freeze and unfreeze your credit reports each time someone needs access. At $5 - $10 a pop that can add up. Equifax has extended free credit freezes for the time being but that isn't the case with all bureaus (at least not yet) and it's temporary.”
Then too, it can be a hassle. “Many people don't realize how often their credit information may be accessed outside of applying for credit. Get a new cell phone? Utility service? Satellite TV? A credit check is likely going to be involved. You don't always know which bureau companies are going to check. You have PINs or passwords to keep track of. All this can add up to a hassle factor. You may be fine with that, but do realize what you're getting into,” she says.
But what concerns her most though, is that it gives a false sense of security. “Yes, a freeze may prevent new credit accounts from being opened, though it's not foolproof, but it doesn't stop someone from phishing their way into your bank account, or protect you from medical or taxpayer id theft, for example. Your current accounts can still be compromised. This means you must remain vigilant and carefully monitor your accounts, even with a freeze in place.”
She has personal experience, “I was recently a victim of identity theft. I placed a fraud alert, not a freeze, on my credit reports. Would I ever place a freeze? Sure. But likely I would do that if I were the victim of serious identity theft, including multiple accounts opened in my name. For a data breach, I personally would not.” When you have a fraud alert, you’re notified if someone attempts to open a new account or access credit in your name.
Mark Tsipsi, CEO and founder of MOR Credit Advisors, thinks for most people, a credit freeze isn’t the best response to the Equifax breach. “I have a better chance of getting hit by a car after writing this email than having my identity stolen from the Equifax breach. I am recommending ALL of our customers to obtain a credit monitoring service in order to be vigilant of any fraud. This way they can contact the financial institution immediately, close the account and remove the information from their report. This may take between 15-45 days”.
For who might a freeze make sense? “I would only suggest a security freeze for two types of consumers- A. Anyone in contract for a home purchase, already been pre-approved or B. Someone who has already experienced an identity theft.”
What to Do?
Though a credit freeze may not be necessary, there are plenty of other things you can do. Robert Harrow, a credit expert with ValuePenguin, a consumer research company, has a to-do list.
Check credit report
“Consumers are entitled to get free credit reports, check yours for any unauthorized accounts which might have been recently opened in your name. This can be a good first step in discovering whether you've become a victim of fraud,” says Harrow.
Report the Incident
If you spot any fraudulent accounts opened in your name or suspicious transactions, get in touch with the card issuer, file a police report, and report the breach to the three credit reporting agencies.
Consider ID theft services
Consumers who find themselves overwhelmed by the fraud in their name can look into card issuers' ID theft services to recover from the violation. “Citi, for example, helps affected customers by contacting TransUnion to review their credit reports and place an extended fraud alert on their credit files. The alert will transmit automatically to their credit files maintained at Experian and Equifax as well. Issuers also help by walking victims through the process of submitting a police report, and even monitoring affected customers' credit reports for any unusual activity on any other accounts until their case is closed,” says Harrow.
Sign up for an SSN scouring service
Says Harrow, “These services promise to thwart fraudsters before they can commit fraud with your card. Most notably, Discover’s Social Security number monitoring service, which recently launched, will track risky websites that are known to authorities to unlawfully sell or trade personal data. If your Social Security number shows up on one of these sites, Discover will alert you. Additionally, the card issuer will let you know if any new credit cards, mortgages, auto loans or other accounts appear on your credit report.”
And this data was ALL your significant private info and in a neat package all in one place, something never before breached all at once, previous breaches have been only pieces of your data here and there.
That said, note that anything you do to protect yourself will have to be done for the rest of your life -- this data is now out there, and it will take the thieves a LONG time to go through all that -- they will still be doing first hits on people 20, 30 years from now when no one even remembers this breach.
Anything you do to block THEM also blocks YOU. This article is correct in noting that you will be surprised at how much this can interfere with YOU doing legitimate, routine things. You will have to plan all your decisions in advance, and un-do any protection measures you took in advance, and then after the fact set up the protection again.
Frankly, while everyone is talking of a credit freeze, you can largely do just as well with a free fraud alert on your credit records. But that will also interfere with you being able to do routine things like open a bank account, potential employers will check your credit and see that as an issue, for the rest of your life you won't be able to do any number of things on the spot because you found a great deal, you will have to pass on that until you can un-do the protections you set up, it will always have to be a plan in advance so you can first contact and take the fraud alert off and give enough time for that to take effect.
Everybody seems worried about TODAY. TODAY your chance of facing ID theft is 1 in 146 million. It is as more and more time passes that you will be in more and more danger, not very likely this week.
There is no good, easy solution to this. This is havoc, and for the rest of your life. No crushing, bankrupting fine on Equafax, no length of prison terms for the executives will fix this.
I only found out I was a victim of id theft after I found out a tax return was filed in my name, and then shortly after that, I found out a Comcast account was opened in my name in another city where I never lived. I found out about that one when it was turned over to collections.
is it free in New Jersey to freeze and unfreeze any time you want and as much as you want?
By the way, Equifax has lifted the fee for all states until November 21.
We need thirty years of help and they magnanimously offer two free months.
Equifax: WABOA
Every person should decide for themselves if it makes sense to freeze your credit or not, in part based on the laws of your state.
I froze my credit 8 years ago at Equifax, Experian, Trans Union, Chex and Lexus-Nexus, long before I was subject to any known credit breeches. For me, the cost seemed small when compared to paying for an annual credit monitoring service (8+ years ago they didn't offer free comprehensive credit reporting services like they do now). Not long after I froze my credit, my state (North Carolina) passed a law making it free to freeze and thaw your credit if you do it online or via Telephone. There are several other states that make this free by law as well. It should be a federal law IMO. It costs credit reporting agencies almost nothing to let you do it from their web site.
Sure, what happened at Home Depot, Target, etc exposed my CC information. But in the last few years I've been notified that my SSN, DOB, address and lots of other personal information was released via the Athum, OPM and a few other breeches. There is no doubt that my information was out there on the "dark web" or whatever scare phrase the media wants to call it, long before the most recent situation at Equifax.
Does frozen credit cause me a problem, not really. I've been all the way through security clearance process with frozen credit. I just have to plan ahead. New employer wants to pull my credit, I coordinate with them on when I thaw it. I want to open a new credit card, I thaw my credit for 1 day, then apply. I want to open a new bank account, I also thaw Chex for 1 day. I've opened up a few dozen accounts since freezing my credit. Maybe 3 times I've had a problem, in 8 years. Mostly because I thaw my credit for 1 day and the bank didn't pull my credit during that window.
If you've been living in a cabin in the woods the last 25 years, maybe you're personal information is safe, otherwise it's out there somewhere you don't want it to be. After this latest breech it's not a question of if you're data is in the wild, but when it'll be used.
Unless you're opening dozens of new accounts a month, just freeze it and forget about it till you need it.
If encrypted, this breach should represent a materially reduced risk, depending on the level.
Given that they refuse to answer this simple question, odds are that it was not encrypted.
Who needs the CPFB, anyhow?
This process should be the default one. The fact that credit report agencies will allow 3rd parties to access your report without your explicit consent is absurd.
Credit reports are all about your track record of debt repayment. CD's are savers near zero risk "loans" to banks and CU's that they can loan to the debtors. Banks and CU's take the risk, debtors get the lifestyle, the pizza and the payment book.
.
Credit reports are all about your history of debt repayment. Most savers could care less.
There are 3 sets of access to your account: a) Personal b) Business c) Government, what you are freezing is your own Personal profile and nothing else (it affect you only, you can not deny the financial institutions access nor to the Government your profile with all of the details included).
Only solution is for the credit companies to issue new profile with security pins accessible by you only and or approved by you only. I say, nobody cares about the consumer and no such feature will ever be given to the consumers. We are on our own perilous future, we are just a number to be exploited by anyone who already has a copy of our documents. Do not expect any help from anyone, fight for your own survivor.
"...Take the case of Oregon resident Julie Miller, who said she repeatedly reached out to Equifax from 2009 to 2011 to correct errors in her credit report. They included accounts she never opened, uncollected debts she never ran up and even a Social Security number that wasn’t hers.
"Atlanta-based Equifax apparently had merged Miller’s file with that of another woman with the same name and a similar Social Security number. Yet the company shrugged off Miller’s complaints.
"In 2013, a jury awarded Miller $180,000 in compensatory damages and a whopping $18.4 million in punitive damages, reflecting a sense among outraged jurors that Equifax just couldn’t be bothered to help a distressed consumer.
"A federal judge subsequently reduced the amount of punitive damages to $1.62 million, citing the precedent of earlier cases. Nevertheless, U.S. District Court Judge Anna J. Brown ruled that Equifax “engaged in reprehensible conduct.”
"Under Loudermilk’s bill, Miller’s compensation would have been limited to the $180,000 in compensatory damages, with no punitive damages possible...."
My wife and I had our personal information stolen by a hospital employee. They tried to get credit from Dell who contacted me about the fraud. They had information on the person but my local PD would not take any action as the person lived in another area and they did not have resources to pursue a case. It was hard enough to get them to write a report. We had to freeze our accounts. We also used our AMEX card to charge the co pays and that person used that too. AMEX actually called us and shutdown the card. My wife's is a lifetime freeze. I just renewed mine.
The town I live in now has a fraud officer that persues cases of fraud.
A freeze is the only logical solution. It take a couple of minutes to lift a freeze using your password. Not a big deal at all.
If it happens, I will resolve it as I did about 20 years ago when my identity was stolen. It was nowhere near the pain that people think it is. Of course, I wasn't buying a house at that exact time.
I hadn't heard of discovers new service. I will sign up for that.
Innovis is actually a legitimate credit reporting company. It is not a new company. I use them once each year to obtain a free copy of my credit report. It works like this:
At the beginning of each quarter I request a free credit report on a rotating basis, one each per year from each of the four credit reporting companies. This seems to work better for me than limiting myself to only three reports per year. And I have found the Innovis report to be equal in value to the other three.
If you have not already checked out the free Innovis report, give 'em a try. You can request your free report (limit one per year) by first going to their website:
https://innovis.com/personal/creditReport
What I'm looking for is a credit card to use when I use rental cars. Specifically, I want the cc to be first in line for any collision/comprehensive expense (never had any in the past) to be covered. If one has any car loan/lease or newer vehicle, they probably have coll/comp with the car insurer (who covers the liability issue no matter what) and the cc companies I've seen would want to see (if there is an accident) your ins declaration page on coverage to see if you do have coll/comp, if it is there then the cc companies (from those I've seen and thus why this "long" inquiry/post) would deny that they are to cover the coll/comp loss.
I would think that most readers would rather have the cc company cover since that "should" not impact any claim count against your auto ins. Thus, the Q
Any cc companies out there that would not "care" as to whether or not you have coll/comp with car ins entity as to that coverage? Thanks!
Its been 20+ years since I rented a car but I only had liability only on my car at the time and I verified that I think Visa would provide rental insurance before I rented.
Its not usually the bank, its Visa. Or Discover or whatever. I think most of them provide this now.
Of course, I never had a wreck and I did decline the extra the rental car company tried to add.