Simple steps to freeze and unfreeze credit reports after identity theft: Internet Scambusters #624
This will probably turn out to be a record year for identity theft after a wave of major hack attacks on retail and financial institutions.
If you're a victim, it's important to implement either a freeze on your credit record or a fraud alert.
But which should you choose and what's the difference? We explain in this week's issue.
Let's get started...
Identity Theft: How to Freeze Your Credit
2014 has turned out to be a disastrous year for identity theft, especially with the theft of credit card details and numerous security breaches at retailers and card companies.
In fact, most of us will probably be lucky if at least one of our credit card details failed to end up in the hands of crooks.
The only consolation is that, in many cases, these data thieves end up with incomplete information. For example, they may have your card number but not the three-digit security code on the back. Or they may be short of other critical identifying information.
Also, because they've got so many incomplete details, they find them more difficult to sell because their relative value has fallen.
(Most hackers don't use the stolen card details themselves; they sell them on the crime underworld market.)
We've written about identity theft many times before, of course, and you may want to check out both our ID Theft Information Center and one of our earlier issues, What to Do if You Become the Victim of a Stolen Identity.
Since those reports were written, however, the odds against falling victim at some time have increased significantly so it's time to take a closer look at your options for shutting out the crooks from exploiting your information.
First, as we've explained in earlier issues, it's now critically important to monitor your card details regularly -- daily if you can.
Many card issuers will now send you an email every day or every time there's a transaction on your account but you should also run an online review if you can.
If you haven't already set up online access to your card accounts, it's worth finding out how to do this securely by visiting your card company's website.
One of the most important actions you can take if your identity and/or your card details have been compromised is to freeze your credit, so no one can start using your name to open other accounts and borrow money in your name.
What is a Credit Freeze?
A credit freeze, or security freeze as it's sometimes called, prevents access to your credit report -- the details of your borrowing and repayment behavior stored by the big reporting agencies, TransUnion, Experian and Equifax.
When anyone tries to borrow money or open an account, the first thing a bank or other lender does is request a copy of your credit report from these companies.
If they can't get it, they most likely will not lend money, thereby protecting your creditworthiness. The good news is that taking this action also does not affect your actual credit score, the key number that summarizes your suitability as a borrower.
(Note however that existing creditors and debt collection agencies acting on their behalf can still access your report.)
So, if you're a victim of ID theft, how do you freeze your credit?
Well, first, you have to do it separately for each of the three reporting agencies.
Here are their toll-free numbers:
- Equifax: 1-800-525-6285
- Experian: 1-888-397-3742
- TransUnion: 1-800-680-7289
Tell then you want to freeze your credit. They'll ask for personal information, including your Social Security number.
They will then send you a letter of confirmation that includes a PIN security number or password, which you will need to reverse the freeze -- so keep it somewhere safe.
They'll charge you a nominal fee of around $10. They'll also charge another fee when you reverse the freeze, but the cost varies according to the circumstances and where you live.
It's worth knowing that you can actually request a temporary lift, for instance if a potential employer intends to run a check on you. If you find out which company they'll be checking with, you can save yourself some money by lifting the freeze just at that one company.
Difference Between a Freeze and an Alert
There's a difference, by the way, between a credit freeze and a fraud alert.
An initial fraud alert is more commonly used when you suspect your identity might have been compromised but you're not sure.
In this case, companies can still seek a copy of your credit report but the reporting agencies have to contact you with a request for your permission.
An initial alert lasts for 90 days, but you can protect your credit longer -- for up to seven years -- with an extended fraud alert.
If you're in the military, there's also a mid-stage, allowing you one year of protection.
To implement a fraud alert, you only need to contact one of the agencies and they will let the others know. There's also no fee.
In the case of both a freeze and an alert, the important thing is to implement them as swiftly as possible.
It's not the financial loss you suffer from fraudulent use of your card that matters -- that's normally limited to $50 by the card companies -- but the impact on your longer-term creditworthiness that identity theft can cause. It can take years to put right.
Alert of the Week
Which celebrity names are the most likely to lure victims into clicking on malicious scam links?
According to security company McAfee, the Top 10 for 2014 (from number 1 down) are Jimmy Kimmel, Armin van Buuren, Ciara, Flo Rida, Bruce Springsteen, Blake Shelton, Britney Spears, Jon Bon Jovi, Chelsea Handler, and Christina Aguilera.
Think before you click that name!
That's all for today -- we'll see you next week.