start for credit freeze
Reporting bureaus make it hard to use
new law for fighting identity theft
When a Pioneer Press reader heard about Minnesota's new
credit freeze law, he jumped at the chance to try it out. He
found himself jumping through hoops instead.
So he asked the Watchdog to find out why credit reporting
companies seemed to make a straightforward law designed to
protect consumers so complicated.
The law went into effect Aug. 1 and is the most powerful tool
you have to protect yourself from credit fraud. It lets you
"freeze" your credit file with the three major credit
reporting companies, Equifax, Experian and TransUnion, so no one
can use stolen information to take out loans or open accounts in
your name. When you place the freeze, creditors, like banks or
stores, can't give credit to an imposter because your credit
file will be locked.
But that also means you can't get credit easily. So it's
important for consumers to know when it's worthwhile to take
this step and how to do it.
As our reader found out, the credit reporting companies don't
make it easy.
TO FREEZE OR NOT TO FREEZE
Freezing your credit file is an important step for victims of
identity theft, said Darryl Dahlheimer, of LSS Financial
Counseling, a credit-consulting organization. But if you haven't
noticed anything fishy on your credit report or haven't had
important personal information stolen, like your Social Security
number, then you don't need to freeze your credit.
Checking your credit regularly to spot signs of fraud is a
more appropriate step, he said. Consumers are entitled to one
free credit report each year, so Dahlheimer advised ordering a
free report from a different company every four months. That
way, you get three free credit reports each year.
But if someone does have your identity and is using it to
rack up bills, freezing your credit file is the only surefire
way to stop the thief.
The Watchdog spent the better part of a day trying to figure
out how to freeze her credit with the three companies. After
that, it still wasn't clear.
Minnesota is one of the few states that allows you to place
the freeze over the phone, but you wouldn't know it by calling
the credit reporting companies or visiting them online. The
numbers to call if you're a Minnesota resident are buried in the
fine print of the companies' Web sites. Only Equifax directs
people by phone to information about credit freezing.
The instructions the Watchdog eventually found on the Web
make it sound like mailing each company a certified letter is
the only way to freeze your credit. The companies are required
by law to place the freeze within three days of receiving your
letter and they must respond to you by mail with a personal
identification number within 10 days. You use this number to
give someone access to your credit file if you need to take out
a loan or set up an account.
After translating business days into real days, you'll be
waiting longer to get your file frozen and your PIN. Identity
thieves aren't likely to take a break on weekends.
WHY IS IT SO HARD?
lthough these companies want to appear friendly to consumers,
Dahlheimer said, they are set up as a tool for creditors.
"Every step forward for consumers in the credit report
world has been mandated by the government, not offered up by
credit reporting companies," he said.
With the freeze available to more and more consumers (25
states now have similar laws), the companies fear they will get
less business, said Beth Givens, director of the Privacy Rights
"They want free flow of credit information because
that's how they make money," she said.
However, the companies warn people against a hasty decision
about freezing their credit if they have not been victims of
identity theft. It can be difficult to open cell phone or store
credit accounts when you've frozen your file.
"This shouldn't be done as a knee-jerk reaction,"
said Rod Griffin, Experian's manager of consumer education.
Freezing your file also can mask other types of fraud, he said.
If criminals can't get your credit information, they'll find
another way to rip you off, like check fraud, Griffin said.
Dahlheimer disagrees. Freezing your credit is "the same
good idea as locking your car door," he said. Sure, a
determined thief could still break in, but most thieves, when
they realize it's locked, will move on to an unlocked car.
"That doesn't keep me from still locking my car,"
WILL PROCESS IMPROVE?
Will it get easier? Not if it's up to the companies, Givens
said. So Minnesotans should contact their state lawmakers or the
Attorney General's office if they are unhappy with the credit
"Under the law, this process should be consumer
friendly," said attorney general spokeswoman Amy Brendmoen,
who urged people to call the office with complaints.
It takes time for companies to adjust to new laws.
"But it's been about two months now," she said.
"The intention was not that people would have to jump
through 2 million hoops to do this."
The bill's intent was to protect consumers, said Sen. Dan
Sparks, R-Austin, Minn., the bill's chief author. Though he
negotiated a six-month time frame for the companies to make the
full transition, "You'd think they'd be getting to the
point where it's not so difficult," he said. He told the
Watchdog he'd be willing to "firm up" the language in
the law if the companies don't begin to make the process more
Editor's note: Feel like an underdog because of a problem
with a business, government agency or school? Maybe the Pioneer
Press Watchdog can help. Go to www.twincities.com
and follow the link to our Watchdog home page. Or call
651-228-5419 or e-mail watchdog@pioneer press.com.