Security experts and consumer advocates are increasingly telling people that one of the best ways to prevent identity theft is to freeze your credit report.
That way if someone steals your identity – as has happened in mass data breaches like those at Home Depot and the federal government – the thief won’t be able to open a new account in your name. Creditors check these reports before approving new financial or service accounts.
You can lift the freeze with a PIN and an ID number, although it can take up to three days for that to happen.
Of course, freezing your credit is a must if your identity has already been stolen. But is it a good idea as a preventive measure?
Mark Medley, a victim of identity theft who heads ID Theft Resolutions in the Albuquerque area, thinks so.
“It’s better to have the safeguard on your report before something happens than waiting” until afterward, Medley said.
The Better Business Bureau also believes there is merit in a credit freeze, said Connie Quillen, executive assistant in the Albuquerque office.
“With a crime like identity theft, this is one of the things a consumer can do to be proactive rather than reactive,” she said.
However, freezing your credit can be inconvenient because you won’t be able to get instant approval for a loan, credit card, mortgage, insurance, cell phone and other types of applications.
“Big deal,” Medley says. He points out that having to wait a few days for a freeze to be lifted is nothing compared to the years of hassle when a thief steals your identity.
Medley became a victim when his wallet was stolen at a Summerfest event in 2001 by a felon who used Medley’s name the next time the thief was picked up by police. What followed was months of trial and tribulation for Medley as he worked to clear his name and sort out the tangle caused by the incident.
However, Medley does hedge his support for a credit freeze because it may be difficult for some people to afford.
To be effective, a freeze should be placed with all three major credit reporting companies – Equifax, Experian and TransUnion. The cost can range from nothing to $10.50, and there’s a smaller fee imposed if you want to lift the freeze. There are no fees at all if you’re 65 or older or have had your identity stolen.
Medley points out, though, that this is cheaper than the alternative of credit monitoring. With that step, the bank or credit reporting company checks your credit report daily and notifies you when there’s an irregularity. It costs as much as $20 – per month, Medley said.
Those who are interested in a freeze, should keep in mind that it won’t stop a thief from using your existing accounts. You will still need to monitor bank, credit card and insurance statements for fraudulent transactions.
There’s a new kind of robocall in which you answer the phone, but no one’s there. It’s from an automated computer system that aims to build a list of numbers for future phone-based scams, according to AARP.
The group advises getting caller ID and not answering when there’s someone you don’t know on the other end.
Ellen Marks is assistant business editor at the Albuquerque Journal. Contact her at email@example.com or 505-823-3842 if you are aware of what sounds like a scam. To report a scam to law enforcement, contact the New Mexico Consumer Protection Division toll-free at 1-800-678-1508.