What is a Security Freeze and How Much Can it Cost or Is it

[Hello MFC-Robert]

Under California law (Cal. Civil Code Section 1785.11.2), a security freeze is placed by a consumer credit reporting agency at the request of the consumer. The consumer must make the request in writing directly to a specific credit reporting agency. Once in place, the consumer credit reporting agency may not change any “official information” about the consumer, such as their name, address, SSN, or DOB without giving the consumer at least 30 days written notice. (Cal. Civil Code Section 1785.11.3.) Within 10 days of placement, the consumer reporting agency must give the consumer a unique PIN or password to authorize temporary access to release the credit report to specified parties or for a specified period of time.

Once the security freeze is in place, only the consumer can grant access to his or her credit report to a prospective user. Thus, prospective creditors are prevented from accessing a consumer’s credit report while a freeze is in effect. The credit reporting agency will temporarily lift the freeze within three business days of the consumer’s providing proper identification or the password or PIN given by the credit reporting agency. Section 1785.11.2 gives credit reporting agencies several options to communicate with the consumer, to promptly process a consumer’s request to lift the freeze temporarily. In no event should a credit reporting agency need more than three business days to comply with the consumer’s properly authenticated request to lift a security freeze. Each consumer reporting agency gives consumers the ability to manage their security freeze online.

The security freeze will not fully block access to the consumer’s credit report, however, as Civil Code Section 1785.11.2 excludes a number of agencies and entities from being blocked. For example, the freeze will not stop access by creditor pre-screening, tax authorities, law enforcement and child support agencies, trial courts, creditors or debt collection agencies, their subsidiaries, agents and employees.

Under Civil Code Section 1785.11.2, each credit reporting agency can charge up to $10 to place, remove, replace, or temporarily lift a security freeze. However, the victim of identity theft may not be charged a fee if they have submitted a valid report of identity theft, such as a police report or Department of Motor Vehicles investigative report that refers to violation of Penal Code Section 530.5, one of California’s criminal laws concerning identity theft. Persons age 65 or older may not be charged any fee for placing a security freeze, but the credit reporting agency may charge up to $5 to remove, replace, or temporarily lift the freeze of person over age 65.

Other states have similar laws that allow consumers and victims of identity theft to block a credit reporting agency from releasing his or her consumer report. Additionally, each national consumer reporting agency (Experian, Equifax, and TransUnion) provides for security freezes of a consumer’s report for those who don’t reside in a state having a security freeze law in effect. A security freeze appears to be permanent, unless removed by the consumer.