Thirty-nine states and the District of Columbia have enacted laws requiring the credit bureaus to allow consumers to protect their credit files with a security freeze. The eleven states that have not adopted security freeze laws are Alabama, Alaska, Arizona, Georgia, Idaho, Iowa, Michigan, Missouri, Ohio, South Carolina, and Virginia.
Four states, Arkansas, Kansas, Mississippi, and South Dakota, have security freeze laws limited to identity theft victims. Washington state's law currently limits the freeze right to identity theft victims, but all consumers will become eligible under the state's law next September. On November 1, all three major credit bureaus will make this protection available to all consumers in these states, even if they haven't had their identities stolen.
In one-third of the estimated 10 million cases of identity theft each year, crooks use stolen personal information like Social Security numbers to open new accounts in their victim's name. A security freeze gives consumers the choice to "freeze" or lock access to their credit file against anyone trying to open up a new account or to get new credit in their name.
When a security freeze is in place at all three major credit bureaus, an identity thief cannot open a new account because the potential creditor or seller of services will not be able to check the credit file. When the rightful consumer is applying for credit, he or she can lift the freeze temporarily using a PIN so legitimate applications for credit or services can be processed.
For the eleven states without security freeze laws, Experian, Equifax, and TransUnion will provide the freeze at no charge to identity theft victims and charge non-victims $10 to initiate the freeze and $10 to lift it temporarily or remove it altogether.
However, the credit bureaus must still offer the freeze at a lower cost and more favorable terms where required by state law. Lower fees are mandated by security freeze laws in the District of Columbia, Hawaii, Indiana (no fees allowed), Louisiana, Maryland, Massachusetts, Minnesota, Montana, New Jersey, New Mexico, New York, North Dakota, Tennessee, Vermont, and West Virginia. The states with the most consumer-friendly security freeze laws typically charge $5 or less to initiate the protection.
Consumers Union has urged the three credit bureaus to charge consumers no more than $5 to initiate and temporarily lift the security freeze and no fee to remove the safeguard altogether. The group has called on the credit bureaus to make the security freeze easier to use by enabling consumers to initiate the freeze by regular mail, phone or through a secure electronic method and to lift the freeze within 15 minutes of making a request. A number of states have passed laws requiring that a 15-minute "quick thaw" be available by September 2008 or soon thereafter.
All three credit bureaus require consumers to initiate the security freeze by making a request by mail. Experian enables consumers to lift the freeze within 15 minutes by making a request online or by phone. Equifax and TransUnion allow consumers to lift the freeze by phone or by mail, but the request can take up to three days before going into effect.
"Experian should be applauded for making the freeze easier to use," said Kenney. "All three credit bureaus should make it fast, affordable, and easy for consumers nationwide to take advantage of this important identity theft safeguard."
