Recently, a background check company called National Public Data confirmed they had experienced a data breach earlier in the year. As a result, the personal information for millions of Americans had been compromised – including, in some cases, Social Security numbers.¹  

Now, it appears the breach was perhaps not quite as devastating as initial headlines made it sound. (It appears most of the data was inaccurate, incomplete, or mixed up, and many of the records belonged to deceased people.^2&3 ) But still, the news serves as a valuable wakeup call. Data breaches occur fairly frequently in the United States. They subject consumers to possible identity theft, financial fraud, cyberstalking, and more.   

What are you doing to protect your data?

If you’re like most Americans, the answer is probably, “not much.” According to a survey by the Identity Theft Research Center and DIG. Works, only 3% of adults chose to freeze their credit after receiving a data breach notice – even though freezing your credit is one of the best ways to prevent identity theft.³  

One possible reason for this is that credit freezes have traditionally cost money. But many don’t realize that you can freeze your credit for free!

Thanks to a 2018 law called the “Economic Growth, Regulatory Relief, and Consumer Protection Act,” credit reporting bureaus like Equifax, TransUnion, and Experian must offer free credit freezes.⁴  

SEC. 301. PROTECTING CONSUMERS’ CREDIT.

“(A) IN GENERAL.— Upon receiving a direct request from a consumer that a consumer reporting agency place a security freeze, and upon receiving proper identification from the consumer, the consumer reporting agency shall, free of charge, place the security freeze not later than…1 business day after receiving a request by telephone or electronic means…[or] 3 business days after a request that is by mail.”⁴  

– Economic Growth, Regulatory Relief, and Consumer Protection Act

What is a credit freeze?

To calculate your credit, agencies like Equifax store important data like loan and payment history, birth dates, Social Security numbers, and more. Whenever you apply for a loan or approval on a credit card, banks and other lenders will request that information from a credit reporting agency. 

When you apply for a credit freeze, the agency will essentially lock, or freeze, your file so that it can’t be accessed. That way, even if a lender requests your information, the agency will not release it until you “thaw” the freeze first. It’s away to keep your personal information from falling into the wrong hands. That’s because it restricts access to your credit report. Creditors cannot access your report which keeps them from approving any new credit account in your name — fraudulent or legitimate.⁵ 

In many cases, you can safely keep your credit frozen year-round unless you need to apply for a loan. Unfortunately, many people don’t take advantage of this. Some may think it still costs money, while others find the process too arduous. And some, likely, don’t think identity theft will ever happen to them. That’s despite the fact that, in 2023 alone, 1.4 million Americans fell victim to identity theft!⁶

A few things to know:

• To get the most protection, you should freeze your credit at all three of the major credit reporting agencies. Visit these websites to learn how:

TransUnion: transunion.com/credit-freeze

Experian: experian.com/freeze/center.html

Equifax: equifax.com/personal/credit-report-services/credit-freeze

• The law also enables parents to freeze their children’s credit for free if they are under age 16. While a child’s identity is usually not as vulnerable as an adult’s, it still can be protected, and it’s a terrific way to teach children about the dangers of identity theft!
• While a credit freeze is a valuable weapon in the fight against identity theft, it won’t protect you from everything. That’s why you should also check your credit report regularly. (You can still request a credit report even if your credit is frozen.) 
• Freezing your credit will not affect your credit score.

To learn more, visit the Federal Trade Commission’s website at https://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs. 

Identity theft is one of the biggest threats to reaching your financial goals. Take steps to protect your identity as soon as possible. Please let me know if you have any questions – and be sure to visit the links listed above to learn more!

1 “Hackers may have stolen your Social Security number in a massive breach,” CNBC, https://www.cbsnews.com/news/social-security-number-leak-npd-breach-what-to-know/

2 “The weirdest ‘3 billion people’ data breach ever,” The Verge, www.theverge.com/2024/8/14/24220212/national-public-data-breach-social-security-3-billion | “The massive SSN breach is actually a good thing,” Vox, www.vox.com/technology/367986/freeze-credit-equifax-experian-transunion-ssn-breach

3 Identity Theft Resource Center, “New Identity Theft Research Shows Consumers Know About Credit Freezes But Rarely Use Them,” www.idtheftcenter.org/post/new-identity-theft-resource-center-research-shows-consumers-know-about-credit-freezes-but-rarely-use-them/

4 “Text of TheEconomic Growth, Regulatory Relief, and Consumer Protection Act,” www.congress.gov/bill/115th-congress/senate-bill/2155

5 “How to place or lift a security freeze on your credit report” USA.gov www.usa.gov/credit-freeze

6“2024 Identity Theft Facts and Statistics,” IdentityTheft.org, https://identitytheft.org/statistics/