Scam of the day – November 1, 2017 – Why credit freezes are better than credit locks

Recently,  the IRS Commissioner made a curious statement when he declared that it was doubtful that the recent massive data breach at Equifax affecting 145 million people would make a big difference in instances of income tax identity theft.  Income tax identity theft occurs when identity thieves file phony income tax returns using the names and Social Security numbers of their victims.  Unfortunately, the reasoning behind his statement was that there have already been so many massive data breaches, including the data breach at the federal Office of Personnel Management in 2015 in which personal information of 21.5 million people was stolen, that the chances are pretty good that your personal information already has been compromised.

Not very comforting.

The best thing you can do to protect yourself from many forms of identity theft is to put a credit freeze on your credit report at each of the three major credit reporting agencies.  However, the credit reporting agencies are recommending that you use a new invention of theirs which they call a “credit lock” instead of a credit freeze to protect your data.  They tout them as being more convenient and tie them into other services.  However, the truth is that you are better off with a credit freeze than with a credit lock.  Credit freezes are governed by laws that protect you, while credit locks are creations of the credit reporting agencies pursuant to contracts which they can change at will.  In addition, you may not desire the extra services you end up paying for at Experian which includes credit locks in security packages that can cost you more than a credit freeze while providing services you may not need.  Quite frankly, I don’t trust any of the credit reporting agencies to have our best interest as their primary motivation so I believe you are better off choosing to put a credit freeze on your credit reports at each of the three major credit reporting agencies rather than a credit lock.

TIPS

To get started, it’s best to first understand the laws and fees governing credit freezes in your state. The National Conference of State Legislatures describes the credit freeze laws for each state. 

To get the maximum protection from identity theft, it is important to freeze your credit at each of the three major credit reporting agencies. Here are links to each of them with instructions about how to get a credit freeze: 

Once you have frozen your credit, be sure to keep the PIN and information on how to unfreeze your credit report in a safe place.

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