Data leaks at companies like ChoicePoint and Lexis-Nexis have prompted more than 1 million bad-news letters telling consumers they are now vulnerable to identity theft, reports MSNBC. What should consumers do? The answer has been vague and unsatisfying: watch your credit report and hope for the best.
State legislators around the country are proposing credit report “security freezes.” A freeze would lock down a consumer’s credit report, preventing anyone — including the legitimate consumer — from instantly opening new credit cards or taking out loans. Until recently, only Californians had the right to implement a security freeze, but the idea has spread like wildfire across statehouses in recent months. About 20 states now have pending legislation which would force credit bureaus to give consumers the right to freeze their accounts. Only after a consumer provides evidence they are who they say they are, a process known as “thawing,” can credit be granted. Thawing can take up to three days, and generally can’t be done at the point of sale. Stuart Pratt of the Consumer Data Industry Association criticized credit freezes as “a little like telling consumers to brick up their windows and doors to prevent burglary, but then you can’t get out of house when you need to.”