McGrath, Consumer Union, AARP Announce ID Theft Prevention Proposal
HELENA – Montana Attorney General Mike McGrath Thursday announced plans to pursue legislation to allow Montanans to place a “security freeze” on their personal information. McGrath was joined by Gail Hillebrand from Consumers Union and Claudia Clifford of the Montana AARP.
A security freeze restricts access to a credit history, which in turn prohibits businesses from issuing credit in a consumer’s name without the consumer’s permission.
“What makes a security freeze different – and better – is that it is proactive,” McGrath said. “Before they become victims of identity theft, consumers can take steps to ensure that credit, loans and services are not issued in their name unless they say so.”
Here’s how a security freeze works:
- The consumer contacts the reporting agency, or credit bureau – via the mail or electronically – and places the freeze on the information.
- Once the freeze is in place, the credit bureau may not release a consumer’s credit report or other information unless the consumer allows it.
- A credit bureau can release the fact that there is a freeze on the information, but it cannot imply that the freeze reflects a negative credit history or rating.
- If a credit bureau violates the freeze and releases the consumer’s information it must notify the consumer. The consumer is then free to file a complaint the Federal Trade Commission of the Office of Consumer Protection in the Department of Justice.
- If the consumer applies for loans, credit or other services that may require a credit-record check, he or she can temporarily “thaw” or lift the freeze for a particular creditor.
- The freeze doesn’t prevent credit checks by entities with which the consumer already does business.
Hillebrand said a state security freeze is a much more powerful tool for consumers than the federal “fraud alert.”
“Fraud alerts don’t stop creditors from getting the credit record or credit score,” she said. “The only type of fraud alert available to consumers before they become victims of identity theft only lasts 90 days, and it doesn’t even require the creditor to contact the consumer.
“This won’t stop ID thieves the way that locking up the credit file with a security freeze can,” Hillebrand said.
Also Thursday, AARP released the results of a telephone poll about identity theft and Montanans’ attitudes about it. Eight hundred Montana registered voters were surveyed by telephone in late January.
“The survey showed clearly that Montanans are concerned about becoming a victim of identity theft and want more protections,” said Claudia Clifford, Associate State Director for AARP Montana.
The survey found:
- about 78 percent of those surveyed said they support security freeze legislation in the state;
- more than half of those surveyed are concerned about becoming a victim of identity theft through someone getting access to bank accounts, checking account or credit cards, and
- more than 70 percent said it is important for the state to strengthen law and regulations to protect consumers from identity theft.
“Montanans understand the effectiveness of a security freeze to protect themselves from identity theft, and they object to high fees being charged by credit bureaus for this protection,” Clifford said.