Did you know that when you take out a loan, pay your credit card bills or conduct business with your bank that credit reporting agencies collect information on you?
They know your Social Security number, where you live, when you were born and what kind of car you drive.
It’s your information but credit reporting agencies make a profit by selling it.
So why do they charge you to protect your information when you freeze your credit?
It seems like we hear about a new data theft every day, including information stolen on 145.5 million people from the credit reporting agency Equifax.
Experts, including AARP Fraud Watch Network Ambassador Frank Abagnale, say one of the best ways to protect yourself is to freeze your credit. Freezing your credit doesn’t mean you can’t use your credit cards or other forms of credit.
>> Make it your top priority to check your credit regularly.
>> Provide your Social Security number only when absolutely necessary.
>> Shred all mail and documents with your personal info using a secure micro-cut shredder.
>> Check each transaction on credit card statements.
>> Retrieve mail as soon as possible after it is delivered or invest in a locking mailbox to avoid mail theft and thieves re-routing your mail.
>> Be selective with whom you share your personal information.
>> Be on the lookout for skimmers or bugged keypads on ATMs.
>> Use strong passwords and change them on a regular basis.
>> Pay with credit cards, not debit cards. The fewer credit cards you have the better.
>> Keep your firewall, antivirus and spyware protection up-to-date on your computer.
What it means is that whenever someone wants to access your credit report, you have to give permission by unfreezing — some call it thawing — your credit.
State law allows credit reporting agencies to charge consumers each time an agency freezes or thaws your credit. In Hawaii, that fee is about $5. Equifax waived the fee for those affected by the breech. But the two other major credit agencies — TransUnion and Equifax — still charge the fees. The fee is waived if you can show you are a victim of identity theft.
The state Department of Commerce and Consumer Affairs is proposing legislation to eliminate the $5 fee to freeze your credit.
It’s time for that to happen. AARP Hawaii supports giving consumers the right to a free credit freeze.
Abagnale, who was in Hawaii recently, helped South Carolina — where he lives — pass the first state law waiving fees for credit freezes.
“It’s your information,” he said at his identity theft prevention seminars on Oahu and Maui. “They make money off of your information. Why should they charge you to protect your information?”
Abagnale also pays a credit monitoring service to let him know about what’s happening with his credit in addition to regularly reviewing his credit reports. There are several credit monitoring services to choose from and they vary in price and what they provide.
And here’s something to consider when looking for a credit monitoring service — see if they will monitor the credit of your children. Why? Because identity thieves love children. They’re not likely to apply for credit for a long time, so that means an identity thief can use their Social Security numbers and information for a long time without anyone finding out.
One last tip from Abagnale — use a credit card, not a debit card. When you use your credit card, you are putting the credit card company’s money at risk if your identity is stolen. A debit card, on the other hand, puts your money at risk.
If there’s a fraudulent charge, you can dispute it with a credit card company and still have access to your credit. A debit-card dispute will freeze access to your money until the bank finishes its investigation.