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You can chill identity theft with a credit freeze starting July 1(South Florida Sun-Sentinel (KRT) Via Thomson Dialog NewsEdge) Jun. 14--Florida's newest consumer tool is called a credit freeze. Starting July 1, Floridians can ask a credit bureau not to disclose their credit scores, history or any information without the consumer's permission. "Essentially, you're removing yourself from the credit system entirely," Rod Griffin, a spokesman for the credit bureau Experian, said. That could be beneficial for the more than 17,000 Floridians who last year became victims of identity theft and probably thousands more who will fall victim this year. But it's an extreme measure that could crimp a freewheeling financial style by eliminating the path to instant credit. Florida's law went into place last week when Gov. Jeb Bush signed it, but the debate is far from over. There are efforts on Capitol Hill to pre-empt the 22 state laws that allow credit freezes and replace them with a national standard. In one national bill that the credit bureau industry favors, access to credit freezes would be sharply limited, available only to people whose identities already have been stolen. Consumer advocates say states are doing the right thing by making credit freezes broadly available. A credit freeze "is the one thing you can do as an individual to prevent a particularly insidious form of identity theft, which is new account opening," said Gail Hillebrand, senior lawyer with Consumers Union. "A thief may still steal your info, but he won't be able to successfully get credit in your name." Identity thieves often use stolen information for a long time before the victim realizes it. Many people first learn that their identity has been stolen when they need credit but their application is denied. Before this new law, the only option Florida consumers had was a fraud alert, which doesn't allow you to control who sees your information. A fraud alert, which consumers can place with a phone call to a credit bureau, tells lenders and credit grantors to watch the activity on a credit report closely. Often, the alert includes your phone number for the lender to call in case someone tries to open a new account. However, lenders don't always make that call, and thieves can slip past fraud alerts. In a broad survey on identity theft issued earlier this year, Javelin Strategy and Research found that only 85 percent of identity theft victims said no new accounts were opened after they placed fraud alerts on their credit reports. "The fraud alert process is one I don't feel warm and fuzzy about," said Florida Rep. Sandy Adams, R-Orlando, who co-sponsored the state's credit freeze bill. Adams, who is a victim of identity theft, said a freeze prevents some of the bad activity, while the fraud alert kicks in only after a stranger has already taken advantage of your personal financial information. Consumers will have to wait until July 1 to get all the details of how to request the fraud alert. Credit reporting agencies have until that date to establish guidelines for what information consumers must provide. Consumers will have to make the request in writing and send a certified letter. Credit bureaus caution that consumers might not like a freeze because the process will involve sending certified letters to each credit bureau and proof of identification. Once it is in place, a credit freeze is a complete block that could hamper your own access to your report. With a frozen credit report, you might not be able to take out a loan or get instant credit at a retail store or obtain a cell phone contract. The remedy is to plan ahead. You can lift a credit freeze temporarily if you know you'll need credit. Under the Florida law, the credit bureau has three business days after it receives your request days to remove the freeze. At least three bills in the U.S. Senate address the issue. One from Sen. Bill Nelson, D-Fla., sets nationwide standards and pre-empts state laws including Florida's, but it has been stalled for almost a year. Nelson recently wrote to Senate Majority Leader Bill Frist, R-Tenn., urging him to bring the bill up for debate. "There have been at least 234,000 more Americans who have become victims of identity theft," since the Senate Commerce Committee approved his bill last July, Nelson wrote. The Senate could decide to drop the pre-emption provision, said Nelson's legislative counsel Michael Sozan. "We don't want to unduly trample on strong state laws," he said. Even with a credit freeze in place, consumers cannot completely control who uses their personal financial information. For example, consumers still can receive pre-approved credit card and insurance offers. Those companies don't look at your report but get their information from lists of potential customers. To get your information removed from those lists, consumers can call 888-567-8688. Also, insurers, state and local law enforcement services, those who pre-screen accounts and anyone to whom you owe money have the right to review your credit report. When identity thieves run into a credit freeze, they can always try other kinds of financial fraud that don't require credit checks. A credit freeze "is like building a wall. Every little bit in place strengthens it," said Rubina Johannes, research analyst and author of the Javelin report. "None of them are foolproof, though." Harriet Johnson Brackey can be reached at [email protected] or at 954-356-4614. |