Consumers clamor for free credit freezes in wake of Equifax breach

As momentum builds to drop fees, best thing to do may be get your credit report, wait

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Vic­tims of the Equifax data hack, please sit tight. I’d hate to see peo­ple pay­ing mon­ey for the wrong thing. That’s already hap­pen­ing to peo­ple like, John, in Texas, who end­ed up regret­ting his pur­chase of a $19.95 cred­it mon­i­tor­ing subscription.

Also, I think even­tu­al­ly the right thing is going to hap­pen and con­sumers will be able to freeze their cred­it reports—for free. There is, final­ly, momen­tum in that direction.

Bob Sul­li­van, jour­nal­ist and one of the found­ing mem­bers of msnbc.com

If you are sure you don’t need new cred­it, it should be easy to shut down your cred­it file so nobody else can get new cred­it in your name, either. The idea is a decade or more in the mak­ing and real­ly, it’s hard to under­stand why any­one would object to it.

Relat­ed arti­cle: 3 things you should be doing in the wake of the Equifax hack

OK, folks who sign you up for a retail store cred­it card at check­out do stand to lose some­thing. But real­ly, it’s a good idea to put a small speed bump between you and new cred­it. And it seems deeply unfair to make con­sumers pay for this.

I’ll admit that hav­ing the gov­ern­ment force a com­pa­ny to cre­ate soft­ware that does some­thing makes me a lit­tle squea­mish. But then these com­pa­nies are mak­ing mon­ey off con­sumers who nev­er real­ly offered their con­sent in the first place.

Flur­ry of bills introduced

Now, there are bills float­ing around Con­gress to force cred­it bureaus to offer free freezes. Last week, Sen. Ron Wyden, R-Ore., intro­duced the Free Cred­it Freeze Act.

Giv­en the fre­quen­cy of these megabreach­es, it is sim­ply unac­cept­able for the cred­it agen­cies to con­tin­ue to charge hard­work­ing Amer­i­cans who want to pro­tect their cred­it and their iden­ti­ty from fraud­sters. The Free Cred­it Freeze Act gives pow­er back to con­sumers by requir­ing cred­it report­ing agen­cies to pro­vide cred­it freezes to con­sumers at no cost,’ Wyden said.

Soon after, Sen. Eliz­a­beth War­ren, D-Mass., intro­duced the Free­dom From Equifax Exploita­tion Act, or “FREE” Act. It would accom­plish much the same thing.

These might sound like par­ti­san efforts by a minor­i­ty par­ty (i.e., dead on arrival), but the idea could be so pop­u­lar that the effort “may gain sur­pris­ing bipar­ti­san sup­port,” the Amer­i­can Banker said Friday.

Some states looked ahead

Freezes already are free in sev­en states—soon to be eight—where state leg­is­la­tures had the fore­sight to make laws with that strong lev­el of con­sumer pro­tec­tion, accord­ing to the Pub­lic Inter­est Research Group. Illi­nois and Mass­a­chu­setts are con­sid­er­ing such legislation.

Con­gress should lead and make cred­it freezes free for every­one in the coun­try and pass the FREE Act imme­di­ate­ly,” said Mike Litt at U.S. PIRG. “It is out­ra­geous that the cred­it bureaus charge us fees to pre­vent iden­ti­ty theft when we didn’t even give them per­mis­sion to col­lect our infor­ma­tion in the first place.”

The Iden­ti­ty Theft Resource Cen­ter, a non­prof­it that helps folks recov­er from ID theft, has joined the fray, call­ing for free cred­it freezes for all Amer­i­cans. On Mon­day, the agency announced a cam­paign; it’s push­ing a Change.org peti­tion and a #FreeFromAll3 hash­tag on Twitter.

Cred­it freezes are an impor­tant tool in the fight against iden­ti­ty theft. While cred­it freezes are not right for every­one, the issue of cost should not fac­tor into a consumer’s deci­sion on whether or not to use one” says Eva Velasquez, CEO and pres­i­dent of the Iden­ti­ty Theft Resource Cen­ter. “It is our hope that the cred­it report­ing agen­cies will con­sid­er this and allow con­sumers to pro­tect their iden­ti­ty, no mat­ter their finan­cial situation.”

Freezes may spur new hacks

Freezes aren’t per­fect, of course. There’s a huge prob­lem for con­sumers who for­get the “thaw” pro­ce­dure. We’ve learned that PIN codes might not be all that hard to guess. I’m sure, if mil­lions of peo­ple real­ly do insti­tute freezes, that hack­ers will start trad­ing in stolen PINs. We’ve seen this already with two-fac­tor authentication.

Cell phone hack­ing has soared since banks start­ed requir­ing that con­sumers enter a code from a text mes­sage dur­ing logins. But we can’t let per­fect be the ene­my of the good. Cred­it freezes can be a real­ly impor­tant tool for pro­tec­tion against ID theft, and they work bet­ter than most paid prod­ucts. I know plen­ty of con­sumers who have their files frozen, and I don’t know a sin­gle one who has com­plained about the freeze fail­ing. (I do know con­sumers who have trou­ble unlock­ing their files.)

Con­gress should strong­ly con­sid­er giv­ing all con­sumers the right to freeze their cred­it files. It will help restore some of the con­fi­dence lost in the Equifax hack­ing incident.

In the mean­time, it’s a good idea to get a (tru­ly) free copy of your cred­it report from AnnualCreditReport.com. If you get a free score from your cred­it card com­pa­ny, pay close atten­tion to it, look­ing for unex­pect­ed drops. But oth­er­wise, don’t feel the need to rush and sign up for any­thing. Wait to see how this shakes out.

More sto­ries relat­ed to the Equifax breach:
Cyber­se­cu­ri­ty experts out­line the wider rip­ples from Equifax breach
Con­sumers must demand answers on Equifax data breach
As threats mul­ti­ply, cyber insur­ance and tech secu­ri­ty indus­tries start to merge

 


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