Credit bureaus offer nationwide credit freezes

Two of the nation’s major credit bureaus û Experian and TransUnion – offer credit freezes to consumers nationwide.

Experian announced its decision to offer them onáOctober 5; the service will be available November 1. TransUnion began offering theáservice October 15. Another major bureau, Equifax, also plans to offer the service soon.

“The states have been passing legislation, and what we’ve seen is there a consistency now among state laws that enables us to have one process,” said Rod Griffin, manager of public education for Experian. “It’s not really a marketing program where we’re trying to sell a new product, rather it’s a service that’s consistent with what has happened across the country and now is the right time.”

“This was something that consumers wanted, and a lot of states already had laws that applied to consumers that were identity theft victims,” added Clifton O’Neal, senior director of corporate communications for TransUnion. “For those states that didn’t, those consumers had no tools at their disposal, so this offer puts consumers nationwide on an even footing.”

Activating a credit freeze prevents new lines of credit from being opened in a consumer’s name. A credit freeze also blocks access to credit reports and scores. These restrictions limit the information that bureaus can sell to direct mailers, but representatives from the bureaus doubt that offering the freeze will negatively affect the direct marketing industry as a whole.

“When direct marketers get the lists from TransUnion to extend a letter of credit, this offer doesn’t affect that,” explained O’Neal. “But it could potentially increase the qualified response rate for direct marketing campaigns, so people who want to be extended that offer or open that line of credit realize they have to unfreeze their data to get that offer.”

“We do pre-approved credit offers, and if person freezes their file, that person has automatically opted out,” Griffin said. “If someone doesn’t want the offer and won’t respond, it’s generally in the interest of the business to not mail to them, because they won’t respond.”

Both men also pointed out that, because it is such an extreme measure, freezing credit is not a widely adopted practice. The most frequent users of the service are victims of identity theft.

Credit freezes are currently available to consumers in 27 states, and at least 12 other states have credit freeze laws set to go into effect in the next two years.

To reverse û or “thaw” – the freeze, consumers in most states can use a special pin number to unlock their files. Experian is working to offer near-instant thaw processes over the phone and online.

Businesses with which a person has an existing relationship can continue to access credit information after the freeze.

Experian’s freeze service will be offered free to identity theft victims. Non-victims will be charged $10.

Related Posts