A security freeze is an alert one could place on one’s credit report and allows a consumer to tell a credit reporting agency not to release the consumer’s credit report without prior authorization using a secret personal identification number (PIN). A security freeze can be useful to mitigate the effects of an identity theft. Nevertheless, security freezes are not for everyone. They come with their own costs and hassle as they will tie up a lot of consumer transactions that otherwise come off without a hitch.
According to Consumers Union, thirty-nine states have laws authorizing consumers to place security freezes on their credit reports. If you don’t live in a state with a security freeze law, the credit reporting agency is not required to honor your request for one. A year ago, a bill was pending in Congress that would have provided a weak federally authorized security freeze and preempted all state laws. Now, three bills are pending in Congress that would provide federal authority for a security freeze and would leave state laws in place. What a difference a year makes.
These three bills are S. 806, the Identity Theft Prevention Act; S. 1178, the Consumer ID Protection and Security Act; and the recently introduced H.R. 3316, Identity Theft Prevention Act of 2007. One obvious difference between this year and a year ago is that a different political party is in control of the U.S. Congress. At the same time, nothing prevents any member from introducing a bill on the topic.