Some Good News on Identity Theft

Obtaining credit has never been easier. Easy credit, however, makes for easy crime. The credit approval process often amounts to little more than matching two bits of information on an application — a name and Social Security number — with a credit report.

Identity thieves hit pay dirt when they use their victim’s good credit history to open a wide variety of new accounts such as credit, checking and Internet. The thieves skip out on the bills, and creditors unknowingly pursue the victims and destroy their credit in the process. This crime, known as “new account fraud,” often costs businesses and consumers a significant amount of time and money because it takes much longer to discover and correct than “existing account fraud.”

Minnesota’s ID Theft Freeze Law
A new Minnesota law, effective August 1, 2006, can help citizens protect themselves from new account fraud. The law empowers any consumer to freeze his or her credit report by simply contacting a consumer reporting agency and requesting a credit report freeze. This freeze will deny identity thieves access to the consumer’s credit history and prevent them from obtaining new credit cards or loans under the consumer’s name.

Starting August 1, any Minnesotan can impose such a freeze on his or her personal credit report for any reason. Victims of identity theft can have their credit reports frozen without charge. Non-victims can proactively freeze their credit report for a $5 fee. When a credit reporting agency receives a freeze request, it must place the freeze within three days of the request, and provide a unique PIN to the consumer within ten days of the request.

The consumer may then use the PIN to temporarily lift or “thaw” his or her report for a specific period of time or for a specific creditor. For example, suppose that you are looking to purchase a new car. If you know that you want to buy the car from Dealership XYZ, you may contact the credit reporting agencies and allow that specific dealership to access your credit report. Or you may request that your credit report be accessible to any creditor for a specific period of time, such as 30 days. After the specified time, your credit report will automatically refreeze. Like placing the freeze, victims of identity theft can thaw their credit reports without charge, while non-victims may be charged a $5 fee.

Freezing Your Credit Report
These credit reporting freezes are a new defense in the fight against identity theft. As this crime continues its climb to the top of law enforcement charts, be proactive in protecting yourself from its expensive, time-consuming consequences by freezing your credit report.
For instructions on how to request a credit freeze, consumers may contact the three nationwide credit reporting agencies as follows:

Ordering Your Free Annual Credit Report
The above consumer reporting companies have set up one central location to order your free annual report. The request can be placed via the Internet (www.annualcreditreport.com.com), by calling 877-322-8228, or writing: Annual Credit Report Request Service, P0. Box 105281, Atlanta, GA 30348-5281. Please make sure to direct your request here; do not contact the three nationwide consumer reporting companies individually for the free credit report.