Credit freezes are one of the most powerful tools you have against fraudulent use of your identity. Unlike a fraud alert, which just requires that creditors take reasonable steps to verify your identity when a credit request is made in your name, a credit freeze stops creditors from accessing your report at all. If a creditor can't access your file, they're unlikely to extend credit to you.
You must freeze your credit file with each of the three major credit bureaus (Equifax, Experian, and TransUnion) individually. Each bureau will give you a PIN to use for future thawing and re-freezing of your credit. You may want to also freeze your credit at the lesser-known credit bureau Innovis, as it's still a potential avenue for enterprising thieves to get your info.
Another lesser-known avenue for identity thieves is the National Consumer Telecom & Utilities Exchange (NCTUE). The group, created in 1997 by AT&T, serves as a clearinghouse for account information and payment histories of its members.
Phone carriers and other utility service providers (cable, power, water, etc.) increasingly use NCTUE information for their credit checks – understandable, since it contains the information most relevant to their industry. However, an identity thief who can't get past a credit freeze to open credit card accounts in your name may still be able to open a cell phone account or establish utility services if the entity uses NCTUE for credit checks.
Consumers with frozen credit-bureau accounts have already reported fraudulent cell phone accounts being opened in their name. Identity thieves could certainly rack up massive unpaid bills – especially given that they don't care about the bill.
As with an unknown credit card account, you may not find out about the unpaid charges until you receive a collections notice. False cell phone and utility records are even more insidious because they aren't reported to the credit bureaus until they show up as delinquent accounts. You have no good way to check for the opening of the account in the first place.
The NCTUE Consumer Page provides a phone number to call to freeze your NCTUE account, along with online links – although a recent article by Krebs on Security suggests calling due to difficulties with the online method.
Remember that you'll need to temporarily lift the NCTUE freeze when you want to apply for cell phone or utility services.
There's one more freeze to consider. ChexSystems is the banking equivalent of the credit bureaus, gathering information on the use (or misuse) of savings and checking accounts. They report risk scores and reports to banks and credit unions to evaluate requests for new accounts.
ChexSystems allows you to freeze your account in a way similar to the credit unions – and, as with the other freezes, you must remember to unfreeze the account when applying for banking services.
Since you'll need to periodically unfreeze your accounts and each account has an individual PIN associated with it, make sure you organize all the necessary PINs. It will take time to re-establish your account if you've lost your PIN – and, realistically, would you want it to be easy for anyone to call up claiming to be you and successfully acquiring your PIN information?
Identity thieves are incredibly persistent. You must be equally persistent to thwart their efforts. Use credit/ account freezes as part of your identity theft defense. Don't give thieves any window to abuse your accounts, no matter how small the window may be.
If you would like to prevent identity theft, check out Identity Protector by MoneyTips.
Photo ©iStockphoto.com/AntonioGuillem
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