A Security Freeze Can Protect Your Credit But Take Some Time to Thaw

___

A recent warning from the Internal Revenue Service raises the question of when it is wise to consider placing a security freeze on your credit files.

The IRS warning focused on a bogus e-mail intended to fool taxpayers into thinking they were under investigation by the agency's criminal division.

The scam tries to entice people to click on a link or open an attachment. If either one is opened, culprits get remote access to the person's hard drive with the ultimate goal of obtaining personal and financial information that could be used for identity theft.

This type of warning is so frequent these days that I wonder who is falling for these fake e-mails. But people do.

And because so many people are victimized by these scams or have their personal information compromised, many states have enacted laws that allow consumers to tightly control who has access to their credit files. These laws prevent credit bureaus from releasing information from someone's files without express consent -- a security freeze.

While a security freeze provides great protection, you need to think carefully about whether to implement one. With a security freeze, lenders and businesses can't access your credit file and so aren't likely to issue new credit. That in turn greatly reduces the chance that a thief will be able to get credit in your name.

You can, however, lift the freeze temporarily, but it can be time-consuming. The process may require a fee, generally about $10, and it can take up to three business days. Many states have provisions that require credit bureaus over the next few years to establish an electronic, telephone or Internet method to allow consumers to lift a freeze in a matter of minutes.

To implement a freeze, you have to send a certified letter to each of the three major credit bureaus.

At the beginning of the 2007 legislative session, 17 states were considering adding security-freeze laws, according to Consumers Union. But by the time many of those legislative sessions wrapped up, only nine legislatures -- Arkansas, Indiana, Maryland, Mississippi, Montana, New Mexico, North Dakota, West Virginia and Wyoming -- had passed such laws, bringing the total of states with security freeze laws to 35, plus the District. A proposed law in Virginia did not pass.

Here's a look at the recently passed freeze laws, beginning with those that take effect July 1:

· Mississippi residents who have been victims of identity theft can get a security freeze.