My article last week about the ability to "freeze" your credit with the credit agencies so no one can steal your identity has caused me to get a lot of mail. I'll reproduce one letter I have received already:
Tracey: Read your article/letters re Credit Freeze.
Thought you might like to know:
Identity theft is the fastest growing crime in
The average person spends $850 and 4-5 years undoing an Identity Theft.
A Fraud Alert may well be ignored by the teen in the cell-phone store, but here's a further consequence. Most credit-granting systems are computer-based and therefore untouched by human hands. The grantors don't want their costs to rise by confirming each application with a Fraud Alert. Hence it is more cost effective to just deny credit when a Fraud Alert is present; the law of unintended consequences.
The credit bureaus make their money out of selling our information. They consider this data to be their property and they don't want us exerting any control over its use such as by locking our records.
Lastly, if memory serves me, you can obtain a PIN specifically for the use of the credit grantor. It is different than your PIN and is good only for the one transaction. I haven't used this method as it flies in the face of a computer-based granting system. The only downside of Freezing is the impulse buyer who is offered a 10% discount at a dept. store if they take the store's credit card. Frankly, anyone who does this clearly knows little about credit scoring algorithms and the "hit" that their FICO (not all but most credit bureaus/grantors use Fair Isaac's FICO scoring system ) score can take. While it takes 3 business days to get your records unlocked, you can then leave them open for the credit grantor's scoring system for a week to three weeks and they are then frozen again automatically. What is the likelihood that an identity thief will try during that "window"?
For me, freezing my credit records gives me peace of mind but in physics we learn that "for every action there is an equal and opposite reaction". It is only a matter of time until the crooks learn some other way to beat the freeze or steal our money or identities; the latest being intercepting debit card number's in an ATM network to directly steal our checking account money. Unlike credit cards, debit cards, favored by 20-somethings, don't carry the same Federal protections.
I will cover the topic further as information comes in.