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Agency to Offer Credit Freezes
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Consumer advocates say the credit bureaus have traditionally resisted offering credit file freezes because they interfere with business operations.
Jeannine Kenney, a senior policy analyst with Consumers Union, which publishes Consumer Reports magazine, applauded Experian's decision as "a strong first step" but said more action is needed by states and the federal government to guarantee that these new abilities become rights, and that freezes are not bundled with other fee-for-service offerings.
Kenney added that states need to continue to fight for reducing the barriers to filing a freeze, such as the cost. The credit bureaus require consumers who wish to freeze their credit file to do so in writing, via certified mail, unless state laws force the bureaus to provide other options.
"The cost, method and ease of temporarily a freeze can all be artificial barriers if not done correctly," Kenney said.
Experian's Williams said a fraud security alert is a better option for many consumers who are concerned about identity theft. Consumers who have fraud alert on their credit file are called by the credit bureaus if they or someone else tries to open a new line of credit in their name. In theory, the bureau is not authorized to open the account without reaching the customer, but fraud alerts are sometimes ignored.
Consumers nationwide can place a 90-day fraud alert for free by calling one of the big three bureaus. The contacted bureau is required to alert the other two to take similar measures.
The credit bureaus prefer to sell credit-monitoring services, but consumer advocates say these pricey services don't prevent identity thieves from opening lines of credit in other people's names. The bureaus also have profited by selling consumers the right to view their credit histories. But consumer advocates note that under federal law, all consumers can obtain one free copy of their credit report per year from each of the big three bureaus.
Before consumers pay for a credit freeze, they should check to see whether their state offers them the right to place or lift freezes for free or at a lower cost, consumer advocates say.
