Why Credit Freezes Fail to Protect Against Identity Theft and Fraud
After the 2017 unprecedented Equifax mega breach, protecting the personal information of consumers has been a lingering hot button. However, not much has happened regarding changes impacting the credit-reporting industry. And, although September 2018 federal U.S. law allows people to freeze and unfreeze their credit at the three major credit bureaus without being charged, it should not be viewed as the panacea to protect yourself from identity theft. Here’s why.
Credit Freezes Alone Don’t Address More than 80% of Identity Theft
There’s no argument that a credit freeze, also coined as a “security freeze,” can make it more challenging for cyber criminals and fraudsters to open new accounts in your name. But, beware – a free credit freeze may provide consumers with a false sense of security that their personal information is now safe. The fact is credit freezes alone aren’t enough to fully thwart identity thieves. Freezes are limited because they really only help potentially protect against new accounts opened in your name (see the next point on why this is limiting). New fraudulent account openings is actually one of the rarest types of identity theft out there, affecting only four percent of victims (Bureau of Justice).
As data breaches grow in ubiquity, consumers, businesses, and anyone who wants to safeguard their Personally Identifiable Information need a comprehensive, proactive approach that can protect against synthetic identity theft, mobile phone takeovers, utility account compromises, criminal record infringement, tax-related fraud, real estate and title fraud, and so much more. All of these types of fraud make up more than 80% of reported identity theft.
Your New & Existing Credit Accounts are Still at Risk for Identity Theft
Fraudsters may already have enough of your personal information to access your existing bank or credit card accounts. In light of the volume and velocity of today’s data breaches, it’s safe to assume your personal information is out there – perhaps even on the Dark Web. So, the pieces of the puzzle to commit fraud may already exist. Even if you engage in a free credit freeze.
Additionally, a free credit freeze won’t undeniably stop new credit accounts from being opened in your name. It is true that most creditors pull your credit report before granting credit, but it’s not a requirement. And, with free credit freezes, it could even lower credit standards, or entice companies to find new ways to confirm your credit worthiness. In other words, there is no silver bullet.
Consider the Alternatives: Fraud Alert and a Credit Lock
Remember, when you want to open a new credit account you will need to find out which of the three credit bureaus (Equifax, Experian or TransUnion) the company uses to pull your credit file. Then, you will want to lift the freeze on that report or you will need lift the freeze on your record with all three bureaus. Even though a credit freeze is now free, it’s still a bit of a hassle and not quite as empowering as other options.
Here are two options to consider over a credit freeze:
- A Fraud Alert enables you place the alert on your file with one credit bureau and they share the request with the other two.
- A Credit Lock is free from Equifax and TransUnion. You will still need to sign-up with all three bureaus but the result is instantaneous, where a credit freeze can take anywhere from 15 minutes to up to an hour to enable and disable (which can cause further inconvenience if you are applying for instant credit). The workings of a credit freeze and what you need to be aware of does indeed take some education.
If You Want to Take Control, You Need Top-Rated ID Theft Protection
In today’s connected world, relying on a free credit freeze or access to check your credit score, simply is not enough. Even if you, your family, your employees, your partners – essentially everyone you care about – haven’t been impacted by identity theft, the chances are it’s just a matter of time.
IdentityForce and EZShield have united to provide the industry’s top-rated digital identity theft protection and cybersecurity solutions. Our team is committed to providing ongoing resources and tools to help you stay protected and aware of the latest scams and trends. Check out EZShield’s educational blog, Fighting Identity Crimes and don’t forget to subscribe to IdentityForce’s monthly newsletter, as well as email updates from Fighting Identity Crimes.