Identity theft is a costly problem in the United States, costing 12.7 million Americans about $16 billion in 2014, according to Javelin Strategy and Research. The crime can take many forms, including someone using your personal information to open new accounts, apply for loans, steal tax returns, or even register for health benefits.
People who fall victim to identity thieves are frustrated and often unnerved. "It was like somebody invaded my life...It was really frightening that somebody was able to do that," Angela Ruane told Help Me Hank.
Ruane says she received a call from a debt collector about some $2,000 she allegedly owed AT&T. She filed a police report and appealed the charges to the utility company, but she was disturbed that someone was able to open an account. AT&T removed the fraudulent debt and called off the debt collectors,. but Ruane is still worried there could be further fraud.
To Freeze or Not To Freeze?
Recently, the U.S. Public Interest Research Group (PIRG) released a report urging consumers to be more proactive about fighting identity theft. You may have heard about freezing your credit reports after you've become a victim of fraud, but PIRG is now saying you might want to go even further. Freeze your credit reports before identity thieves strike.
"Why would you only want to detect a new account being opened in your name when there's a way to prevent it from happening in the first place,"said Mike Litt of U.S. Public Interest Research Group.
Freezing your credit reports make it very difficult for anyone to open new accounts in your name. Most creditors will not approve credit if they can't get a look at your credit report from one of the three big agencies, Transunion, Equifax, or Experian. You can freeze your credit with the agencies online, by phone, or in writing. It's best to freeze all three, as you don't know which agency a thief might get routed to when they try to get credit.
You may have heard about credit monitoring, but that defense only tells you when someone has already done some damage. "The only thing credit monitoring does, at its best, is let you know after the fact when somebody opened a new account in your name," said Litt.
Freezing Drawbacks
There are some potential drawbacks with freezing your credit reports. It may slow the approval process when you're applying for a loan or a new credit card at a store. However, you can unfreeze your credit, and Litt says it doesn't take that long, "The longest it can take is three days, but our experience and understanding is it can happen online within 15 minutes."
Agencies will provide you with a "PIN" or password that you will confirm your identity if you are seeking new credit. You can even ask the creditor you're doing business with which credit reporting agency it uses and just unfreeze that specific report.
Consumers tell Help Me Hank the idea makes sense. "I mean most of us are not going around getting mortgages or getting new credit cards regularly. That's something we do occasionally," said Jamie Woodward of New York City, as she toured downtown Detroit.
Other things you should know: there is a cost to freeze your credit reports. Litt says the cost in Michigan is $10 to freeze and $10 to unfreeze each report at the different agencies. Freezing your credit report does not affect your credit score. It does not affect how you use your current accounts.
And, freezing your credit report does not prevent fraud involving your current accounts. If someone steals that account information, they still may be able to commit fraud.
Protect Yourself From Identity Theft
Here are some simple steps you can take to protect yourself from identity theft.
Practice safe internet use: avoid suspicious emails, use anti-virus and anti-spyware software, shop online with secure pages.
Never send credit card numbers, Social Security numbers and other personal information via email.
Destroy Private Records: Tear up or shred credit card statements; ATM, credit, or debit card receipts; bank deposit receipts; loan solicitations; and other documents that contain private financial information.
Secure Your Mail
Empty your mailbox quickly and get a mailbox lock. When mailing bill payments and checks, consider dropping them off at the post office or a secure mailbox.
Be Careful With Your Social Security Number
Your social security number is a major target for identity thieves because it can give them access to your credit report and bank accounts. Never carry your card with you. Instead, memorize your number and keep the card in a secure place at home or in a safe deposit box. Never write or print your social security number on checks.
Beware of Scams
Always be on the defensive with your private information. Never give out personal information to telemarketers or respond to emails from someone claiming to represent your bank, credit card issuer, a government agency, a charity, or other organization. If you think the request is legitimate, contact the company directly to confirm their claims.
For more information on freezing your credit reports, you can check with the agencies below: