FTC Consumer Information to Help Individuals After the Equifax Data Breach Decide Whether to Place a Fraud Alert, Credit Freeze or Credit Lock
In light of the Equifax data breach, the FTC provided FAQ guidance to help individuals decide whether to place a fraud alert, credit freeze or credit lock on their credit files to help stop or prevent identity theft.
What is a fraud alert?
A fraud alert requires companies to verify your identity before extending new credit, which usually means calling you to determine if you are really trying to open a new account.
How do I place an Initial Fraud Alert?
The three national credit reporting companies (Equifax, Experian, TransUnion) keep records of one’s credit history. If someone has misused your personal or financial information, call one of the credit reporting companies (TransUnion 1-800-680-7289; Experian 1-888-397-3742; Equifax 1-800-525-6285) to request an initial fraud alert on your credit report.
If you are concerned about identity theft, but have not yet become a victim, you can also place an initial fraud alert. For example, according to the FTC, you may want to place a fraud alert if your wallet, Social Security card, or other personal, financial or account information are lost or stolen. Additionally, you also may want to place a fraud alert if your personal information was exposed in a data breach.
A fraud alert is free, and the company you call must tell the other companies about your alert.
An initial fraud alert can make it harder for an identity thief to open more accounts in your name. When you have an alert on your report, a business must verify your identity before it issues credit, so it may try to contact you.
How long does a fraud alert last?
An initial fraud alert stays on your report for at least 90 days; allows you to order one free copy of your credit report from each of the three credit reporting companies; and after 90 days, you can renew your alert for additional 90-day periods.
Military service members who deploy can place an active duty alert on their credit reports to help minimize the risk of identity theft. An active duty alert on a credit report means businesses have to take extra steps before granting credit in your name. Active duty alerts last for one year and can be renewed to match the period of deployment. Military service members who deploy can get an active duty alert that lasts one year, renewable for the period of deployment. Identity theft victims (whose information has been misused, not just exposed in a breach) are entitled to an extended fraud alert, which lasts seven years.
If you have created an Identity Theft Report, you can get an extended fraud alert on your credit file. When you place an extended alert, you can get two free credit reports within 12 months from each of the three nationwide credit reporting companies, and the credit reporting companies must take your name off marketing lists for prescreened credit offers for 5 years, unless you ask them to put your name back on the list. The extended alert lasts 7 years.
How much does a fraud alert cost?
Again, fraud alerts are free, and with a fraud alert, you keep access to your credit and federal law protects you. Further, initial fraud alert lasts only 90 days, unless renewed.
What is a credit freeze?
A credit freeze limits access to your credit file so no one, not even you, can open new accounts until the credit freeze is lifted.
How does a credit freeze work?
To be fully protected, you must place a credit freeze with each of the three credit reporting agencies. Credit freezes can be placed by telephone or online. You will get a PIN to use each time you freeze or unfreeze, which may take one to three business days.
How long does a credit freeze last?
A credit freeze lasts until you temporarily lift or permanently remove it (except in a few states where credit freezes expire after seven years).
How much does a credit freeze cost?
Fees are set by state law, but, generally, cost $5 to $10 each time you freeze or unfreeze your account with each credit reporting agency. You can get a free credit freeze, if you are an identity theft victim, or, in some states, if you are over age 62.
While Equifax will let you place or lift a credit freeze for free until January 31, 2018, TransUnion and Experian are not offering free credit freezes. And, as of now, Equifax’s offer will end on January 31, 2018. This means that any time you need to get new credit, you will need to remove the credit freeze, then place it again, with each of the three agencies — at a cost of $5 to $10 per agency each time, depending on your state’s law.
Are credit freezes free for identity theft victims, and will I also get free credit freezes from the other two credit reporting agencies? The answer is: No. An identity theft victim is someone whose information has been exposed AND misused. If you are a data breach victim, your information is at greater risk of misuse; unless that happens, you are not an identity theft victim entitled to free credit freezes on that basis.
Many people have had very sensitive personal information exposed in the Equifax data breach, such as Social Security numbers and driver’s license numbers. Equifax is offering free credit freezes until January 31, 2018, and Equifax also will refund fees to anyone who already has paid for credit freezes since the breach was announced on September 7, 2017. If you want a free credit freeze from Equifax, the company can be reached via 1- 800-349-9960 or by visiting freeze.equifax.com.
Should I place a credit freeze?
A credit freeze means that no one (not even you) can access your credit file until you unfreeze it, using a PIN or passphrase, which makes it harder for identity thieves to open new accounts in your name.
To be effective, you must place a credit freeze with all three credit reporting agencies (Equifax, TransUnion, and Experian), because when a criminal attempts to take out new credit, a business can pull your credit report from any of the three agencies. If you have only frozen your Equifax file and the business checks with Experian or TransUnion, your Equifax freeze does not help you.
Credit freezes are generally best for people who do not plan to take out new credit. This, often, includes older adults, people under guardianship, and children. Individuals who want to avoid monthly fees also may prefer credit freezes over credit locks.
What is a credit lock?
Like a credit freeze, a credit lock limits access to your credit file so no one, not even you, can open new accounts until you unlock your credit file.
How does a credit lock work?
Like a credit freeze, to be fully protected, you must place credit locks with all three credit reporting agencies. With credit locks, however, there is no PIN and, usually, no wait to lock or unlock your credit file (although the current Equifax credit lock can take 24 to 48 hours). You can lock and unlock on a computer or mobile device through an “app” – but not with a telephone call.
How long does a credit lock last?
Credit locks last only as long as you have an ongoing credit lock agreement with each of the credit reporting agencies. In some cases, that means paying monthly fees to maintain your credit lock service.
How much does a credit lock cost?
Credit reporting agencies can set and change credit lock fees at any time. As of today, Equifax offers free credit locks as part of its free post-breach credit monitoring. Experian and TransUnion may charge monthly fees (often about $20).
Do I need a credit lock?
Depending on your particular credit lock agreement, your fees and protections may change over time. So, if you sign up for a credit lock, it is difficult to be sure what your legal protections will be if something later goes wrong. Also, monthly credit lock fees can quickly exceed the cost of credit freezes, especially if the credit lock fees increase over time.