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Consumer Credit Freeze Proposal Good for Arizona

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On Sunday, January 7, 2007, Linda Valdez, a columnist from the Arizona Republic urged the legislature to pass a bill allowing people to “put a freeze on their credit reports” as a way to minimize risk of identity theft. According to the Republic columnist, a credit freeze

means that no one can access your credit information without your express permission. Consequently, no one can get a loan in your name. If someone tries to use your credit, they get rejected and you get notified.

Currently, while you can place a “fraud alert” with the major credit reporting agencies, Arizona does not allow you to place a “credit freeze” on your credit record. The distinctions between a fraud alert and a credit freeze are important. According to the Federal Trade Commission web site containing advice about fraud alerts for victims of identity theft,

When a business sees the alert on your credit report, they must verify your identity before issuing you credit. As part of this verification process, the business may try to contact you directly.

In contrast, a credit freeze presents a substantially more restrictive limit on access to consumer credit information. A credit freeze prevents any business or individual from accessing your credit report for any reason without your express permission.

As indicated, a credit freeze prevents unauthorized access to credit and remains a stronger tool to combat identity theft than a simple fraud alert:

A security freeze lets consumers stop thieves from getting credit in their names. A security freeze locks, or freezes, access to the consumer credit report and credit score. Without this information, a business will not issue new credit to a thief. When the consumer wants to get new credit, he or she uses a PIN to unlock access to the credit file.

Kudos to Linda Valdez for suggesting that consumers in Arizona be provided with this stronger option to protect their identities. Why should Arizona be any different than approximately twenty-six other states which allow consumers to place credit freezes and take control of and limit access to their credit reports? This is particularly true because metropolitan Phoenix recently ranked highest in the nation for victims of identity theft. In other words, now is the time for the legislature to do the right thing and give Arizona consumers all the tools available to them to combat the growing crime of identity theft.