TransUnion to Offer Credit Freeze In All U.S. States
TransUnion, one of the three major consumer credit reporting bureaus, said Tuesday that starting next month it will allow consumers to freeze and thaw their credit files as a means to prevent identity theft.
A credit freeze directs the credit bureaus to block access to a consumer's credit report and credit score. At present, at least 39 states and the District of Columbia allow consumers to freeze their credit files, but many of those laws do not take effect until 2008 or 2009. TransUnion would be the first bureau to voluntarily offer freezes to consumers in all 50 states (and D.C.).
TransUnion said that in states where there is an existing freeze law, the company will continue to meet or exceed the requirements of those laws. In states where a law has been enacted, but is not yet effective, or where no law has been enacted, TransUnion will provide freezes free to all identity theft victims. Non-victims would need to pay a $10 fee to add, lift, or remove a freeze.
To place a freeze with TransUnion, consumers will need to submit a request via certified mail, but they will be able to lift it via regular mail or by telephone.
Gail Hillebrand, a senior attorney for Consumers Union, called the announcement "a good first step," but said it won't mean much unless the other two major credit reporting bureaus -- Equifax and Experian -- make a similar offer.
"I think if the other two don't do this, Congress will have to make them do it," Hillebrand said. "This also makes it perfectly clear that freezes on a national scale are doable, despite what the industry has been saying for years now. All their arguments about how difficult it would be [to offer freezes to all U.S. residents] go right out the window with this announcement."
Experian spokesman Donald Girard said the company is considering it. "We're looking at all aspects of this now," he said.
A representative from Equifax said the company does not comment about plans for products or services that it may offer in the future.
A story I wrote back in May provides some background on Hillebrand's comments, as it tells the story of how Consumers Union and other consumer advocates fought an uphill battle against the credit bureaus and the financial industry to win passage of a freeze law in Delaware, arguably America's most corporate-friendly state.
For the millions of consumers who receive notice each year that their personal or financial data was lost or stolen, a preemptive security freeze can offer peace of mind. It blocks businesses and potential fraudsters from gaining access to a consumer's credit report and score, and from granting new lines of credit in the consumer's name. In many states, consumers who want to remove the freeze can use a special identification number to unlock access to their credit file.
Even if all three credit reporting bureaus were to extend the freeze to all U.S. citizens at the same price, it would still cost $30 to place a freeze and another $30 to lift one (since filing a freeze at just one of the bureaus does little good). That's probably beyond what a number of households on limited or fixed incomes can afford. In recognition of this fact, some states have won much lower rates for freezes: Indiana residents, for example, can get them for free, whether or not they can prove they've been victimized by identity theft. A freeze costs just $3 to place or lift in Montana, and the fee is just $5 in both New Jersey and New York.
Some states have gone even further. As detailed in the story I mentioned above, Delaware is among a handful of states that require the credit bureaus to thaw a consumer's credit file within 15 minutes of receiving the request. The other states with similar fast-thaw laws include Minnesota, Montana, New Jersey, Utah and West Virginia.
I am particularly enthused by this news because it means we may soon have credit freeze rights in Virginia, whose legislature gave scant consideration this year to at least two proposed freeze laws.
One thing to note about the announcement, which was oddly enough published without much fanfare via a press release: It looks a lot like the fine print you'd see at the bottom of a free vacation offer. I had to increase the font size in my browser just to read it.
To find out about freeze laws in your state, check out the information at this site.
By Brian Krebs |
September 19, 2007; 5:30 PM ET
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Posted by: SayWhat | September 19, 2007 06:06 PM
I live in Pennsylvania and just put a security freeze into effect with all three credit bureaus. It was $30 well spent (and considering what the credit bureaus charge for their credit monitoring services this is not a bad deal, even if you thaw your freeze once a year).
A few years back my credit card was compromised during the DSW Shoe Warehouse security breech -- although I had no problems I don't want to have any. I was very happy when Pennsylvania instituted this law and am actively encouraging senior citizens in this state to apply since the cost is nothing (except the initial certified mail).
In regards to the concern expressed about authenticating a thaw via mail or phone the process of removing a thaw is as follows:
1) After the credit bureaus receive your request via certified mail they will send you a confirmation letter with a personal ID number.
2) If you wish to thaw your freeze you can call (or go to a web site in some instances) and give the credit bureau your personal ID number and the thaw will occur, either for a specified organization or time frame (up to one month).
3) Should you lose or misplace your ID number then you would have to go through the process of proving your identity via certified mail as when you first applied for the freeze by providing a copy of a utility bill and driver's license.
Brian, you might also want to check with TransUnion to see how long the freeze will stay in effect (unless it is lifted). In Pennsylvania the limit is seven years at which time it has to be renewed.
Posted by: John | September 19, 2007 06:31 PM
This is disgusting. The credit bureaus make billions selling our personal information, treat it sloppily so we have to worry about identity theft, and then have the nerve to charge us for freezing and monitoring. All three bureaus should offer freezing FOR FREE to ALL consumers.
Oh well, once again big money controls the legislators... why should I expect any different.
Posted by: thermowax | September 19, 2007 07:49 PM
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"To place a freeze with TransUnion, consumers will need to submit a request via certified mail, but they will be able to lift it via regular mail or by telephone"
Huh? Isn't that backwards? It should require more authentication (i.e. certified mail) to remove the freeze than to apply it.
If all it takes is a phone call to thaw someone's personal info, there is not much security in the process (think phone companies giving up personal records with just a phone call).
As an analogy, it should be simple/easy to lock a safe, but very difficult to unlock it. Likewise, it should be simple/easy to lock down your personal information (aka a credit freeze), but hard to unlock it (aka a credit thaw).