CREDIT SECURITY FREEZE – A VALUABLE TOOL, BUT KNOW ITS LIMITATIONS

Consumers have a new tool to fight against credit fraud – the credit bureau Security Freeze.

The Security Freeze provided by law in over 24 states, and allows consumers to lock down their credit records and prevent the three credit bureaus from selling the credit information to credit grantors. Many credit grantors will not approve new credit applications if they cannot obtain a credit bureau record of the consumer’s credit history.

Security Freezes, often called Credit Freezes, are opposed by the credit bureaus, because they cannot sell the information to others wanting to offer pre-approved credit, magazine subscriptions or new car deals. Security freezes prevent the credit bureaus from making profits by selling your personal information. They have in recent months been working hard throught their lobbying organizations in Washington to eliminate these state laws.

KnightsBridge Castle advises all consumers, who do not need instant credit, to obtain a security freeze. While not perfect, a security freeze makes it difficult for identity thieves to have false credit granted.

The flaw in credit security freezes is that many companies will issue credit first and seek a credit bureau credit check later. Merchants, offering “Instant Store” credit often grant new cards and accounts to consumers ready to purchase products at a store location. Unfortunately many of these consumers are really identity thieves.

At KnightsBridge Castle we have worked with consumers who had more than 27 in store “instant credit” applications filed with merchants in a short period. The work of professional identity theft rings using multiple thieves to attack store credit was successful in eleven of these attempts. After shutting down the fraudulent credit accounts KnightsBridge Castle case specialists discovered that credit checks were performed on the “instant credit” accounts from three to seven days after the accounts were activated and “maxed out.”