Millions of Americans reported being adversely impacted by identity theft. According to the US Federal Trade Commission (FTC), identity theft was the second largest consumer complaint (after debt collection) in 2017.
The most frequent type of identity theft is credit card fraud. Credit card fraud increased 23% over the prior year. The FTC received more than 133,000 reports last year about information misused on an existing account or to open a new credit card account. Consumers became more vulnerable when over 145 million Americans’ financial information was exposed in Equifax’s data breach last year.
The best way to protect yourself from identify theft related to credit card fraud is to freeze your credit files. Freezing your credit files prevents anyone, including yourself, from opening a new credit card, loan, or lease. To access your credit, you would temporarily unfreeze your account by providing a security code, only known by you, that authorizes the activity.
This extra protection is highly effective in preventing credit fraud. However, credit reporting agencies, who implement the freeze, dislike it because frozen credit files reduce their ability to earn fees from selling your information.
As a result, credit reporting agencies attempt to sell consumers other types of services, such as “credit lock” and “credit monitoring” when they request a freeze. Anything but a freeze provides inferior consumer protection and costs more money than a credit freeze.
New federal legislation makes the process free as of Friday, September 21, 2018. To freeze your credit files, I recommend contacting all of the following providers:
National Consumer Telecom and Utilities Exchange: www.nctue.com/Consumers
Credit card companies and other lenders typically use one or more of the first three firms on the above list before issuing new lines of credit. Cell phone companies, before setting up an account, check with The National Consumer and Telecom Utilities Exchange. Banks often check with the last two firms on the list to verify customer identities when opening new accounts.
Now that the cost has been eliminated, this is the perfect time to protect yourself and your children from identity theft with a freeze on your credit files.