The Common Law

A security freeze prohibits, with certain specific exceptions, a credit-reporting agency from releasing the consumer's credit report or any information from it without the express authorization of the consumer. In short, obtaining a security freeze means that your credit file cannot be shared with potential creditors or potential identity thieves, which makes it an attractive option for a consumer that has been a victim of identity theft or fears becoming a victim in the future.

A consumer must write to one of the three main credit bureaus – Equifax, Experian, or TransUnion – to initiate the security freeze. Each credit-reporting agency charges a $10 fee, unless the consumer can show he or she has already been the victim of identity theft (usually done with a police report), in which case the fee is waived. The freeze goes into effect five business days after the credit-reporting agency receives the consumer's letter. The credit-reporting agency will send the consumer a personal identification number (or password) that allows the consumer to have the security freeze lifted, either for a temporary period of time or a specific party. It takes about three business days to lift a freeze.

Wondering why you haven't heard much about security freezes? Texas has lagged behind other states in providing security freezes as an option to combat identity theft. The ability to obtain a security freeze in Texas was approved by a new law passed in this year's legislative session, which takes effect on Sept. 1. This is due in large part to strong lobbying efforts of credit-reporting agencies, which have not generally been eager to spread the word about security freezes due to their financial incentive to make it easier for potential creditors to check credit reports.

Next week's "Common Law" column will talk more about the nuts and bolts of obtaining a security freeze. In the interim, anyone who wants to learn more about protecting their identity with a security freeze should check out the Texas attorney general's website, www.oag.state.tx.us, or www.consumersunion.org/pdf/security/securityTX.pdf.