CREDIT FREEZE

Dec. 31 didn't just signal the end of 2008 and the ringing in of a new year, it also rang in a new era of consumer protection in South Carolina.

A new consumer protection law passed last April went into effect Dec. 31 and now all South Carolinians have the right to place a security freeze on their credit files maintained by the three large credit bureaus that keep track of your borrowing and repayment history.

The best part of South Carolina's new law, unlike almost all the other states that were faster in giving consumers this protection, is that it's free of charge.

By placing a security freeze on your credit reports under the state's Financial Identity Fraud and Identity Theft Protection Act, you're blocking identity thieves from opening new accounts in your name.

The information in your credit reports is used by lenders to determine if they should lend money or offer you credit.

If they can't see the report, therefore, they shouldn't issue any new lines of credit.

"The security freeze is the only protection against identity theft," said Ed Mierzwinski, federal consumer program director at the Washington D.C.-based U.S. Public Interest Research Group, which has been advocating this type of consumer protection for years.

Consumers have long had access to paid-for credit monitoring services, but Mierzwinski said the security freeze is much more important. "Credit monitoring is an overpriced protection racket sold by the credit bureaus, and sometimes through other companies. It simply tells you the horse has left the barn for roughly $10 a month, and that ain't worth it."

While an identity thief can still apply for credit in the name of someone who has a security freeze, the lender should not complete the transaction because of the freeze.

"Very few creditors will issue credit without a credit report," Mierzwinski said. "In fact, I don't know of any."

South Carolina's new law is actually one of the last to be instituted in the nation. But it's also among the best.

Battles waged by the credit industry in states that were early adopters of security freeze laws often resulted in limitations on who could get a security freeze and, sometimes, at what cost.

A security freeze under South Carolina's law costs nothing regardless of age.

Additionally, under the South Carolina law, consumers won't have to pay any money to temporarily "thaw" or unfreeze their credit files if they want to allow a lender, such as a car dealership, mortgage company, or insurance company, to take a look.

The credit bureaus have to "thaw" your file within 15 minutes of receiving such a request under South Carolina's law.

"I would say South Carolina's Legislature has offered consumers the perfect protection," Mierzwinski said.

The protection is ideally suited for seniors and others who aren't in the credit market, consumer advocates said.

Patty Guthrie, regional outreach coordinator for the South Carolina Department of Consumer Affairs, just recently started passing out brochures on the new consumer protection and plans to start disseminating the information at senior centers and during her frequent consumer seminars.

It was the topic of a Jan. 20 seminar in Spartanburg. She plans to hold a seminar on the same topic in Gaffney in upcoming weeks.

"It's beneficial for seniors or anybody taking care of seniors," Guthrie said. "This is an extra way for them to be able to protect themselves so nobody can come along and open a new account in their name."

Consumers who opt for a security freeze still have to keep their guard up, Guthrie noted, since a freeze won't stop fraudulent transactions on existing accounts.

Instructions for requesting a security freeze are somewhat detailed, and each of the three credit bureaus may request different information. All three companies accept such request by mail but there are other options.

Guthrie said she looked into the process and said it was "a breeze" to obtain a security freeze over the internet with two of the bureaus, TransUnion and Experian. For the third company, Equifax, Guthrie investigated the ease obtaining a security freeze by telephone and though Guthrie said she had to wade through numerous voice prompts on an automated phone system, she found it could easily be done that way as well.

No one should be fearful of the process, she added. "If they are, they can get a trusted family member to help them with it."

In her role with the Department of Consumer Affairs, Guthrie routinely comes across people who have had their identity stolen. That's why she thinks the new consumer protection law is worth a look, especially for people who aren't shopping around for new credit.

"(Recovering) from identity theft is a long, drawn-out process," she said. "Anything I can do to protect myself, I'm going to do it."

HOW TO FREEZE YOUR CREDIT REPORTS

A free security freeze under South Carolina's new consumer protection law can be obtained by writing each of the three credit bureaus at:
Equifax Security Freeze
P.O. Box 105788
Atlanta, GA 30348
Experian Security Freeze
P.O. Box 9554
Allen, TX 75013
Trans Union Security Freeze
P.O. Box 6790
Fullerton, CA 92834-6790

Specific instructions may differ by bureau but if you send your request for a free security freeze by regular or certified mail, Consumers Union and AARP say you generally will have to provide the following information:

Your full name (including middle initial as well as Jr., Sr., II, III, etc.)

Any name you previously used

Current and recent full addresses, including street address, apartment number, city, state and zip code

Your Social Security number

Your date of birth

A photocopy of a government-issued identification card (state driver's license or ID card, military identification, etc.)

A form letter for requesting a security freeze can be found on the AARP.org web site if you keyword search "South Carolina Security Freeze."

CYBERSPACE BURGLARS AND OTHER UNSAVORY CHARACTERS WILL NOW HAVE A TOUGHER TIME USING YOUR PERSONAL INFORMATION

There are other options for obtaining a security freeze online or by telephone. You can check out the Web sites for the three firms for more information at
experian.com/freeze
equifax.com, and
transunion.com

Trans Union can be reached at 888-909-8872, Experian can be reached at 888-397-3742, and Equifax can be reached at 800-685-1111.

Requests for a security freeze are generally handled within five days and consumers will receive a personal identification number (PIN) which they'll need if they ever want to unfreeze or temporarily "thaw" their credit file.