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Experian To Offer Credit Freezes To Consumers

It trails Trans Union; Cost is $10 to lock and unlock

by Martin H. Bosworth
ConsumerAffairs.com

October 8, 2007

The freeze will be free to victims of identity theft. For other customers, it will cost $10 to implement and $10 to temporarily or permanently remove, unless state law mandates otherwise, according to Experian vice-president Kerry Williams.

Experian trails Trans Union, which announced similar plans last month. Equifax claims to be working on its plan.

All three credit bureaus had staunchly opposed credit freezes in the past, claiming the practice would harm consumers seeking credit and slow down industries that depend on instant access to credit.

Consumer advocates and security experts supported credit freezes as the best tool to prevent identity thieves from accessing customer accounts.

Trans Union was the first to break ranks with the bureaus, announcing its plans to offer freezes nationwide on Sept. 18. Although initial reports claimed Equifax would also offer credit freezes, the company has said it is still finalizing details of its own plan and will roll it out by the end of October.

Thirty-nine states and the District of Columbia already have laws on the books enabling consumers to freeze their credit, in many cases for less than the $10 fee offered by the credit bureaus. But consumers have been slow to adopt credit freezes on a wide scale, claiming the process is time-consuming and difficult.

For their part, the three big credit bureaus are aggressively promoting more expensive credit monitoring services, which include instant lifts on credit freezes.

Consumers Union's Jeannine Kenney said that the bureaus should adopt less expensive and more user-friendly practices for locking and unlocking credit freezes.

“The credit bureaus obviously have the technical ability to place and lift a security freeze instantly,” Kenney said. “There is no reason for them to wait until the law requires them to do so. All three credit bureaus should make it fast, affordable, and easy for consumers nationwide to take advantage of this important identity theft safeguard.”

Although easier and quicker adoption of credit freezes would benefit consumers, the credit bureaus continue to push their fraud-monitoring services rather than block access to credit altogether.

“A fraud security alert is a better option for many consumers who are concerned about financial fraud," Experian's Williams said. "A security alert informs credit grantors that a consumer may have been the victim of identity theft, effectively protecting consumers from credit fraud without taking the drastic step of removing them from the credit marketplace entirely."

Credit monitoring services are often criticized for not detecting more complex types of identity theft and fraud, such as "synthetic" identity theft, where the thief pieces together a new identity from component parts of other identities.

Also, credit monitoring does not detect or prevent debit or checking account fraud, which is fast overtaking credit card fraud as the most common form of identity theft.

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