Experts: All Breach Victims Should Freeze Credit

Only 3% of victims have frozen their credit after receiving a breach notice, despite it being the most effective way to prevent fraudsters from opening new accounts in their name, according to new research.

Suspecting consumers aren’t making the most of the facility, the Identity Theft Resource Center (ITRC) polled over 1000 US consumers on the topic.

Less than a third had frozen their credit at one time for any reason, dropping into the low single digits for breach victims. Yet over three-quarters claimed to be familiar with the process.

Despite broad awareness of credit freezing, consumers are often misinformed about the details. The ITRC claimed 11% incorrectly believe it will impact their credit score or require payment to freeze or thaw, and have therefore never done so.

Most respondents said they didn’t think they needed to.

Freezing credit prevents lenders from obtaining a credit report about an individual, meaning they can’t open any new lines of credit, nor can fraudsters use their stolen identity information. It can be done free of charge in just minutes and is widely regarded as more useful than the credit monitoring checks often offered to customers by breached organizations.

The ITRC called for changes to the law so that all breach notifications include an explicit recommendation for the victim to freeze their credit and info stating that credit monitoring alone is not sufficient to prevent new accounts from being fraudulently created.

It also called on businesses, victim advocates and government representatives to collaborate on a new awareness-raising campaign, emphasizing the importance of freezing the credit of children’s accounts when their data has been stolen.

One-third of respondents to the poll said they didn’t think it was necessary to freeze their children’s credit to prevent identity misuse.

Finally, the ITRC wants the credit reporting industry to streamline freeze requests, so individuals do not need to lodge requests with each individual agency, as they have to at present.

“The vast majority of people know what a credit freeze is but do not take advantage of this valuable resource,” argued ITRC CEO, Eva Velasquez.

“A credit freeze is generally considered the most effective tool to prevent new accounts from being opened in your name. This research shows that there needs to be improved awareness and utilization of credit freezes, particularly for children.”

This year is on track to be a record-breaker regarding the number of publicly disclosed breaches in the US.