Rhode Island joins 24 other states in adopting legislation that is designed to thwart identity thieves from committing fraud by using stolen data. Rhode Island, said Attorney General Patrick C. Lynch, is one of 20 states providing all residents with the option of placing a security freeze on their credit files. Five states have statutes that limit security freezes to victims of identity theft.
Lynch said that by prohibiting a credit reporting company from releasing personal credit report information without the express authorization or approval of the consumer, a security freeze protects individuals from thieves who would use one's credit record to open false new accounts.
"It's important to note that the freeze grants each consumer the right to prevent the reporting agency from issuing a credit report or score for the purpose of providing new credit or opening new accounts," said Lynch. "A security freeze, however, does not apply to requests for a copy of a consumer's report by existing creditors for certain types of account review, collection, fraud control, or similar activities."
To activate a security freeze, a consumer must send a letter by certified mail to each credit reporting company, such as Equifax, Experian, or TransUnion, requesting it. Once the company receives the request, it must place a freeze on the credit report within five business days. The company is then prohibited by law from releasing any information in the credit report without the authorization or approval of the consumer.
When a consumer places a freeze, the credit-reporting agency issues a unique PIN that allows the consumer to "thaw" the frozen file. After receiving a request, the company has three business days to lift a freeze.
Lynch points out that if a consumer is actively seeking a new loan, or utility, telephone, insurance, or credit account, procedures involved in lifting a security freeze may slow or block a consumer's applications for credit. He advises consumers who are applying for new credit to provide ample time to lift a freeze, either completely or for a specific creditor, to avoid potential problems.
"Placing a security freeze on your credit file is another valuable tool to thwart identity theft and to protect yourself from being victimized," Lynch said. "Taking this action has no impact on your credit score, and the freeze is good until you remove it."
