Articles

It’s Time for a Free Credit Freeze to Fight Identity Theft by Joseph L. Saka, CPA/PFS


Posted on October 18, 2018 by Joseph Saka

Under a new law, consumers can finally freeze their credit files and protect themselves from the increasing frequency of identity theft without reaching into their pockets to pay a fee.

As of Sept. 21, 2018, all three of the major credit reporting bureaus, including Equifax, Experian and TransUnion, have made credit freezes free for all consumers in all U.S. states. In addition, the new law also allows parents to freeze the credit of their children under age 16 without any costs to them. Previously, consumers were required to pay as much as $10 to each reporting agency every time they froze or thawed their credit histories.

According to security experts, a credit freeze is the best way to prevent criminals from stealing your identity and using that information to fraudulently secure loans or open financial accounts in your name. It alerts the credit bureaus to keep your personal information private and block anyone from running a credit check on you without first receiving your approval, which can only be accomplished by a credit “thaw” that you authorize via a personal identification number (PIN).

Data breaches and identity theft have become all-too-common occurrences of everyday life. Even some of the most admired and well-known brands, including Amazon, Target, Verizon  and most recently Facebook, have fallen victim to attacks that exposed the personal information of millions of consumers. No one is safe. Even Equifax experienced a breach in 2017 that impacted more than 145 million people.

The fastest way to freeze your credit account is to separately contact each of the three reporting bureaus by telephone or by visiting their websites:

Each agency will provide you with a PIN that can you can use to lift a freeze when legitimate financial institutions need access to your credit history in order to extend a loan or line of credit to you. After thawing your account, you may again contact each of the reporting agencies to reinstate the credit freeze.

It is important to note that credit freezes cannot protect you from all forms of identity theft and fraud, including unauthorized credit card transactions. Instead, consumers should carefully review their monthly credit card statements to flag suspicious charges. In addition, they may request that their financial institutions send them alerts them when credit card charges exceed a certain amount or they are processed over the phone or online. As an added layer of protection, you can set up free fraud alerts that require the credit bureaus to contact you and receive your approval to release your credit file anytime a company or financial institution requests that information. Fraud alerts can be established for one year with all three credit bureaus by contacting just one of the reporting agencies.

As a final layer of protection, consumers should check their credit reports throughout the year by visiting www.annualcreditreport.com. By law, you are entitled to receive one free credit report every year from each of the three credit bureaus. Once you receive a report, review it carefully looking for any activity that is out of the ordinary and confirming that it includes only those credit cards or loans of which you are aware and for which you applied.

About the author: Joseph L. Saka, CPA/PFS, is CEO of Berkowitz Pollack Brant, where he provides a full range of income and estate planning, tax and business consulting and compliance services, and financial planning expertise to entrepreneurs, high-net-worth families and family companies and business executives in the U.S. and abroad. He can be reached at the CPA firm’s Miami office at (305) 379-7000 or via e-mail at info@bpbcpa.com.