Law May Help Freeze ID Theft

California residents have the ultimate weapon against identity theft -- but few know it.

That may be changing, however, as a rash of security breaches putting personal information at risk has heightened public concern about privacy.

The weapon is a little-known California law -- the only one of its kind in effect -- allowing residents to freeze access to their credit reports. Such a step effectively prevents identity thieves from opening unauthorized credit accounts in the names of their victims.

Inquiries about the law, which took effect in 2003, have risen dramatically in the last few months, state officials said. And it has generated attention across the country as well: This year, 22 states considered legislation that allows consumers to freeze their credit reports.

“It’s like the rise in sales in paper shredders,” said state Sen. Debra Bowen (D-Marina del Rey), who sponsored the original California bill. Once privacy concerns rise to a certain point, “suddenly, everyone has to have one.”

A credit-report freeze costs $30 -- $10 each to the three major national credit bureaus -- and involves a certain amount of paperwork. But consumers planning to seek credit can, with a few days’ notice and another $30, suspend the freeze whenever they wish.

Victims of identity theft who can supply a police report can freeze their credit report for free.

The little-used provision was part of legislation better known for banning the use of Social Security numbers on publicly displayed documents or identification cards.

The Office of Privacy Protection, the state agency that issues information on the law, has a staff of three to oversee all privacy measures in California, and it has few resources for publicizing the freeze provision.

“Getting a call for information on this measure was rare,” office chief Joanne McNabb said. “We could go weeks without getting one.”

Then in February, Alpharetta, Ga.-based ChoicePoint Inc. -- one of the nation’s largest collectors of consumer data, including Social Security numbers and home addresses -- disclosed that identity thieves had tapped its database. Eventually, the firm said as many as 145,000 of its personal files could have been compromised.

The disclosure kicked off a national debate over privacy, which intensified when information broker LexisNexis, which is owned by London-based Reed Elsevier, announced it had suffered a security breach that eventually turned out to involve as many as 310,000 files.

In the days after each reported scandal, phone calls about the law increased dramatically, McNabb said. She said she did not know how many people had taken advantage of the law, and the three main credit bureaus -- Equifax Inc., Experian and Trans Union -- did not return calls seeking statistics.

Three other states have passed similar laws. A Louisiana law that is set to take effect July 1 will allow residents there to freeze access to their credit reports. In Texas and Vermont, freezes are available only to people who have been victimized by identity theft.

That was the original notion behind the California bill.

“It was to stop the victimization of people who had spent months getting their credit cleaned up after an identity theft attack,” Bowen said, “only to have it happen again.”

Non-victims were added to the bill, Bowen said, for special cases, such as when people want to freeze their elderly parents’ credit reports to protect them from investment scams.

Some consumer advocates say families that are not planning to seek credit in the near future should consider the credit freeze as a preventive tool against identity theft.

“It’s kind of like putting a deadbolt on your door” to your credit, said Gail Hillebrand, a San Francisco-based senior attorney with Consumers Union, the publisher of Consumer Report. It means “no one can unlock it pretending to be you.”

Opposition to the credit-report freeze provisions of the bill, when it was being considered, came mostly from creditor institutions, Bowen said.

“At the end, the last people opposing it were auto dealers,” she said. “They thought if someone decided to buy a car but then walked out to go unfreeze a credit report, they might never see him again.”

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Taking control

To place a freeze

Send a letter and $10 to each of the three credit bureaus. If you are a victim of identity theft, the freeze is free; include a copy of the police report instead of payment.

* Equifax: Send letter by certified mail to Equifax Security Freeze, P.O. Box 105788, Atlanta, GA 30348. Include full name, current and former addresses, Social Security number and birth date. You may pay by check, money order or credit card.

* Experian: Send letter by certified mail to Experian Security Freeze, P.O. Box 9554, Allen, TX 75013. Include full name, current address and addresses for the last five years, Social Security number and birth date. Also include two proofs of residence, such as copies of a driver’s license, utility bill or bank statement. You may pay by check, money order or credit card.

* Trans Union: Send letter (need not be certified) to Trans Union Security Freeze, P.O. Box 6790, Fullerton, CA 92834-6790. Include full name, current address and addresses for the last five years, Social Security number and birth date. You may pay only by credit card.

To modify or end a freeze

People who ask for a freeze will receive information from the bureaus on how to modify it. The charge is $10 per bureau to reopen your credit record for a period of time or $12 to allow a specific creditor access. There is no charge to permanently end the freeze.

For more information: www.privacy.ca.gov/financial/cfreeze.htm

Source: California Department of Consumer Affairs