Update from the Hill: Identity Theft Protection via Free Credit Report Freezes
My recent updates from the Hill have focused on identity fraud protection elements in the Economic Growth, Regulatory Relief, and Consumer Protection Act, that goes into effect this month. In this briefing, I will cover a provision of the Act, Sec. 301 Protecting Consumers’ Credit, that gives consumers the ability to place a security freeze on their consumer report free-of-charge, and allows parents the opportunity to protect their children, who do not have a consumer report, from becoming victims of identity theft.
The provision defines a ‘security freeze’ as follows:
The term ‘security freeze’ means a restriction that prohibits a consumer reporting agency from disclosing the contents of a consumer report that is the subject of such security freeze or, in the case of a protected consumer for whom the consumer reporting agency does not have a file, a record that is subject to such security freeze to any person requesting the consumer report for the purpose of opening a new account involving the extension of credit.¹
Why is protecting a minor’s consumer report so significant today?
ID Analytics estimates that 2.2% of credit applications —or one in every 50 filed under newly issued Social Security numbers (SSNs) carried fake identities last year, up from 1.2% in 2013. Some of those SSNs could belong to children. In 2017 more than 1 million children were victims of identity theft or fraud, according to a report from Javelin Strategy & Research.² The same report revealed that among notified breach victims, 39 percent of minors became victims of fraud, versus 19 percent of adults.³
I recently spoke with Yuka Hayashi at the Wall Street Journal on this important topic, and recommended that parents create a credit file for their children and safeguard it, by freezing their file as referenced in these new guidelines for protecting consumers’ credit. Her recent article, New on Parents’ To-Do List: Checking Children’s Credit History, contains a personal story of one parent’s seven-year battle to repair her daughter’s credit file after the child’s identity was stolen and used to open several credit accounts. The full article is available on the Wall Street Journal’s website.4 The Federal Trade Commission’s IdentityTheft.gov page offers additional resources for reporting and recovering from identity theft.
Ken Meiser is Chief Compliance Officer at ID Analytics
1. Congress.Gov, https://www.congress.gov/bill/115th-congress/senate-bill/2155/text#toc-id22f38422982f4850ab9f1de3e75037c5 (accessed September 10, 2018).
2. CNBC, https://www.cnbc.com/2018/04/24/child-identity-theft-is-a-growing-and-expensive-problem.html (accessed September 10, 2018).
4. Hayashi, Yuka. The Wall Street Journal (2018 September). New on Parent’s To-Do List: Checking Children’s Credit History (accessed September 10, 2018).