I understand that a letter and $5.00 is sufficient to have the three credit reporting bureaus “freeze” your identity report. That way, if someone tries to open a new credit card in your name, the credit bureaus will not authorize it. This seems like a simple way to protect yourself-is it effective? I’m amazed by how little it costs-why spend $120.00/month for an identity shield?
Finally, if your identity is "frozen’ how do you authorize a credit check if you want to open a new account?
I imagine that’s the hard part. If you can freeze your credit reports and unfreeze them at will, why couldn’t someone who had your information, pretending to be you do the same?
It varies from state to state. See Consumers Union’s Guide to Security Freeze Protection.
Actually, I don’t understand why it should cost any money at all.
ralph124, small detail what’s frozen is not your “identity” report, it’s your credit check. It’s just a way to limit people looking into your credit report w/o your explicit, real-time authorization.
Depending on the state’s regulation, it may be that you would be issued a PIN/password for authorizing a valid transaction and/or that the bureau, like a credit card company often does, would have to call/e-mail you to ask “are you really shopping for a $30K car loan?” and get your go-ahead whenever anything came up, within the next X business days.
The deal, as with many security measures in various realms of life, is not to make the misdeed impossible but to make it so you know when someone’s trying, so you can act quickly to react to it. If in Mosier’s hypothetical someone has *already * succesfully stolen your identity (i.e. has all the information the credit bureau uses to designate you), then of course this doesn’t deal with it.
Y’know, it’s funny, in '05 ago I was working on getting a freeze law passed here… you can imagine the wailing and gnashing of teeth and rending of garments from the bureaus and the banks and the loan brokers as to how that would bring the consumer economy to its knees. Now two years later they’re offering it themselves, for a price (The compilation of the report IS work for the bureaus so I don’t mind them charging a reasonable fee for freezes not related to actual suspicions of ID theft; it compensates the loss of revenue for providing quick access for lenders). I argued all along, a citizen who requests this service, is probably one with enough sense so s/he does not apply for credit on impulse so s/he WON’T miss 5-minute approval (Who NEEDS 5-minute approval??) so they’re unlikely to hurt your business.
This seems like a straightforward question with a straightforward answer, so I’m sending it off to GQ.