Here's the Rest of the Story

On September 21, credit bureaus will provide credit freezes at no cost.  This is a good thing--to a point.  Although in the past, these bureaus took days to freeze and then a few days to unfreeze accounts, now they are required to freeze accounts by the next business day and unfreeze within an hour.  Will they be able to execute such a dramatic shift in procedure without hiccups?  We’ll see.  We have been getting regular articles about this new free service and having been in this area of specialty for over a decade, I kept waiting for an article that told the whole story in one piece.  So far it hasn’t happened, so I want to bridge the gap between the typical articles that have addressed the crime of identity theft and the credit freeze. ​

Basically, a credit freeze prevents anyone from opening new credit cards, accounts or loans using your information.  A freeze is bureau specific, so make sure that you implement freezes with at least the big three:  Equifax, TransUnion, and Experian.  The PIN that you are given at the time of the freeze from each bureau is your way to freeze and unfreeze your accounts.  Keep them in a safe place because you will encounter delays if you don’t have them!

Here’s where I want to chime in.  What a credit freeze isn’t

1.  It isn’t a guarantee that you will not be a victim of identity theft
 Why?  Because identity theft is no longer all about credit, it’s more about information—your personal identifiable information or PII.  A credit freeze will not prevent or protect you if someone files a tax return using your social security number.  A credit freeze will not prevent or protect you if someone poaches your health benefits.  A credit freeze will not prevent or protect you if someone commits a crime using your identity.  These are all different faces of identity theft and a credit freeze will not even move the needle toward protection in these cases. 

2.  It isn’t a guarantee that people will not steal money from you. 
How?  A credit freeze will safe-guard against someone opening new accounts, new credit cards or taking out new loans, but it won’t prevent someone from tapping into your existing credit cards and maxing them out or accessing your accounts and cleaning them out.  We have had a few breaches over the years and if your information is in the hands of thieves, they can gain access. 

3.  It isn’t for everyone.
 Why?  People who are buying a home, a new car, phone or renewing a professional license need lenders, vendors, and professional associations to have access to their information so they can conduct business.  Yes, with the new “rule” to unfreeze an account it is supposed to happen within an hour, but what are the consequences if it doesn’t happen that way?  A home purchase could disappear because a loan got delayed, that car could be bought by someone else because your credit report wasn’t accessible in time, the phone purchase will have to wait for another day, and the professional license could be delayed, preventing the ability to work.  At least be aware that a freeze is still a freeze and if you are conducting business, a freeze could impact you in ways you may not have considered.

4.  It isn’t great if you’re seeking employment.
 Why?  Employers do conduct background checks and a credit freeze can hinder that process.  With the new rules, you could unfreeze while searching and gaining employment, then refreeze once employment is secure, but that means you are vulnerable during that time your freeze is deactivated.  At least the process is now free, so that speedbump is out of the way.

5.  It is not a roadblock for you using your credit cards.  You can still freely charge and write checks using your existing accounts.

Identity thieves are smart, ambitious and cunning.  They’ve moved on from just money to coveting your information too.  This makes everyone vulnerable regardless of their socio/economic status and this information does not expire!  Although having access to free and more streamlined credit freezes can slow thieves down with some types of identity theft, it isn’t the all-encompassing solution that has been suggested over the past few months.  We still need to be vigilant and protective of our personal identifiable information (PII) and continue to do the things necessary to safeguard all of it.  

Although credit monitoring services have cropped up all over the place, in today’s world, it’s not enough. Before you invest in a service ask them three questions.

1.  If someone files a tax return using my social security number how will you help me?
2.  If an “unauthorized someone” uses my health benefits, how will you help me?
3.  If I am arrested for a crime I did not commit, how will you help me?

If your service hesitates with any of these situations and can’t reassure you that you are covered for all of them, then you do not have adequate identity theft coverage.
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Lori Lawson is a LegalShield Director and is an ID Shield specialist.  Her company, New Line Associates is located here in Oceanside and she has been a Chamber member for more than a decade.  Visit their website at newlineassociates.com. Email her at lori@newlineassociates.com for a free, no obligation fifteen-minute consultation.