Putting A Freeze On Credit Thieves: A Look At Your Protection Options
Following the Equifax hack, consumers can protect their credit lines by requesting a fraud alert, a security freeze or credit monitoring.
By Daisy Maxey
The Wall Street Journal
September 12, 2017
Consumers who have been affected by the Equifax Inc. EFX -8.20% data breach and seek to protect their credit lines may find themselves navigating a confusing maze of new terms, costs and responsibilities.
There are a few ways consumers can protect their credit lines, including a security freeze, requesting a fraud alert or credit monitoring. The costs for taking some of these actions can vary from state to state and bureau to bureau, and some take days to go into effect.
The most important thing for individuals to remember following the Equifax hack is that they have to be their own best defender, says Matt Masterson, a wealth adviser with Regent Atlantic Capital LLC in Morristown, N.J. “You really have to keep a close eye on your accounts,” he says.
Here, a primer for those who are considering taking such actions:
Security Freezes
A credit freeze will prevent a new creditor from accessing a consumer’s credit report. This move prevents anyone from opening a new line of credit in the name of the consumer who enacted the freeze.
To initiate a freeze, consumers must contact each credit firm and follow their procedures. Consumers may contact each of the three major credit firms at:
Consumers who have been affected by the Equifax Inc. EFX -8.20% data breach and seek to protect their credit lines may find themselves navigating a confusing maze of new terms, costs and responsibilities.
There are a few ways consumers can protect their credit lines, including a security freeze, requesting a fraud alert or credit monitoring. The costs for taking some of these actions can vary from state to state and bureau to bureau, and some take days to go into effect.
The most important thing for individuals to remember following the Equifax hack is that they have to be their own best defender, says Matt Masterson, a wealth adviser with Regent Atlantic Capital LLC in Morristown, N.J. “You really have to keep a close eye on your accounts,” he says.
Here, a primer for those who are considering taking such actions:
Security Freezes
A credit freeze will prevent a new creditor from accessing a consumer’s credit report. This move prevents anyone from opening a new line of credit in the name of the consumer who enacted the freeze.
To initiate a freeze, consumers must contact each credit firm and follow their procedures. Consumers may contact each of the three major credit firms at:
Equifax: Call 800-349-9960 or visit its website.
Experian: Call 888-397-3742 or visit its website.
TransUnion: Call 888-909-8872 or visit its website.
While some experts say consumers should consider freezing their credit at all three firms after the Equifax breach, it isn’t a move that is for everyone. If a consumer does wish to open a new line of credit, he must first unfreeze his credit reports. That may take several days and generally requires the use of a personal identification number that is provided when applying for a freeze.
Keep in mind, too, that a freeze won’t do anything to monitor current lines of credit, such as credit cards.
Fees for adding and removing a credit freeze vary by state, but are nominal, generally from $3 to $10. Consumers can find more information on related state laws on the website of the National Conference of State Legislatures. Generally, fees are waived for victims of identity theft if they submit a valid investigative or incident report or complaint with a law-enforcement agency or other government agency.
David Edwards, president and wealth adviser at Heron Wealth in New York, says those who are past the stage where they’re job hunting, applying for a mortgage or opening new credit lines for other reasons should consider putting a freeze on their credit. He’s advising his clients, most of whom are past that stage, to do so, he says.
Those who may need a credit check to open a new line of credit can always ask the potential lender which credit firm they plan to check the credit history with, then unfreeze their credit with just that credit firm to allow the check, then replace it afterward, Mr. Edwards says. He recently froze his credit with just three five-minute telephone calls, he says.
Fraud Alerts
Those who request fraud alerts will receive notification whenever there is an attempt to check on their credit history. In such cases, the credit firm will contact those who have requested the alerts to ensure they’re legitimate.
Fraud alerts are a federal right for victims of identity theft and are free. And if you place a fraud alert request with one of the three major credit firms, it will automatically be placed with the other two.
But fraud alerts have their limits. An initial alert will last 90 days but can be renewed. With an alert request in place, a third party may still access your credit reports. But if they do so, they will be asked to take certain steps to verify their identity before they are able to act.
To place an extended fraud alert, which will last for seven years, a consumer must file an identity-theft report with law enforcement and contact each of the three credit firms.
Credit Monitoring
Even if other steps are taken, experts say consumers may want to consider having their credit monitored for suspicious activity. Such a service will generally alert consumers to credit inquiries, new credit lines and other important changes to one’s credit profile.
Consumers typically pay a monthly fee of $10 to $30 for such monitoring, and more expensive packages are available that offer more advanced monitoring, such as identity-theft protection services, which go through public-record databases and the dark web, a network of anonymous internet servers where hackers communicate and trade illicit information, to see if a consumer’s information is being used.
Credit-monitoring is sometimes offered as an employment benefit or as a rider on homeowners’ insurance, so consumers should check to see if they already have such benefits, says Eva Velasquez, chief executive and president of Identity Theft Resource Center, a San Diego nonprofit established to protect victims of identity theft and broaden education around cybersecurity and data breaches.
Equifax, following its breach, is offering U.S. consumers the option to sign up for credit-file monitoring and identity-theft protection for one year at no cost. The enrollment period for the offering ends Tuesday, Nov. 21. The offering, called TrustedID Premier, includes credit monitoring of Equifax, Experian and TransUnion credit reports; copies of Equifax credit reports; the ability to lock and unlock Equifax credit reports; identity theft insurance; and internet scanning for Social Security numbers, it said.
But consumers who want credit monitoring shouldn’t sign up for it with one of the credit firms, Mr. Edwards says. He suggests they go to a service such as Identity Guard, LifeLock or myFICO instead.
“I would never get credit monitoring from the credit bureaus. Consumers are not their customers; banks, credit cards and auto lenders are their customers,” he says.
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