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A top expert on ID theft tells The Watchdog, “With the trajectory we’re on with data breaches, I guarantee that your credentials are out there in the wild.” What’s the next step?

For 15 years, I’ve recommended that everyone put a security freeze on your credit history to block crooks from opening accounts in your name.

Now The Watchdog isn’t so sure.

The freeze is a hassle. I hate it. You have to lift it with the three credit bureaus so a company like a bank or a car dealership can check your credit score. If you want to open a store credit card, you might have to take a test on the phone to prove your identity.

I’m close to giving up. So I called Eva Velasquez, president and CEO of the Identity Theft Resource Center in California, to talk out my concerns.

I thought you’d like to eavesdrop on our conversation:

Me: I’ve been recommending security freezes, but I’ve come to the conclusion that the whole process stinks. It’s so annoying, and I’ve lost opportunities to open new accounts and get credit checks for car loans. I don’t believe I should recommend it anymore.

Eva: Can I talk you off the ledge? I hear you about the annoyance factor, and you’re absolutely right that the process isn’t as user-friendly as it should be. But it has gotten better. It’s a lot of friction, and people don’t like friction. When you’re applying for a new store credit card to get 10% off, it does make that a little more burdensome.

Me: I was at a car dealer, and they needed to check my credit. Over the phone, I took a test about parts of my life to prove my ID. I failed because I couldn’t remember the name of the mortgage company I used five years before.

Eva: I hear you, but I guarantee that if you are a victim of financial identity theft, particularly new account ID theft, that is much harder to unwind. It will take 10 times more time than the time it takes to manage thawing your credit when you want to open new lines of credit. Do I want to be inconvenienced now for something that’s protecting me? Or do I want to have the convenience and not have to think about it until I have to deal with an identity crime issue?

And I say “until” because with the trajectory we’re on with data breaches, I guarantee that your credentials are out there in the wild. And that pesky credit freeze, sitting out there in the background annoying you, may be one of the things that’s been protecting you all the time.

Me: You say the process has gotten better. How?

Eva: You can do more of this online, and more thawing [for temporary removal] and freezing if you’re somewhat technologically savvy. For folks that don’t engage digitally and for people with disabilities, you have to do everything over the phone. It’s also free for everybody. You used to have to pay. Now you can even do it for your kids. And it doesn’t take as long to thaw it. Back in the day, you had to wait 3 to 5 days, and now it can be done in a couple of hours.

Me: I applied for a 0% credit card and was rejected. They couldn’t tell me the reason why. But eventually I got a letter that said it was because of the freeze. I called them back and asked, “Which one of the three credit bureaus do you use? Because I’ll go an unfreeze that one.” And they said, “We could use any of the three.”

So I had to try to unfreeze all three, and the whole process with the passwords and the security verifications is so cumbersome, it doesn’t work. You can’t always get into the bureau you want for the time you want.

Eva: The bigger problem there is using knowledge-based authentication. That is something we are urging all organizations to move away from and find better ways. That worked seven years ago, but it doesn’t work anymore.

Me: What’s that?

Eva: It’s the process of asking you questions that only you are supposed to know. Well, that time has passed. The thieves know how to do this. They can call customer service and try to talk their way into getting access to the account. But there are better ways to test.

The bureaus can tell if you’re calling from the known phone tied to your account. And they can ping that device and see that it’s actually pinging off the proper tower where you’re physically located. It’s not in another continent. And they do that with computers as well.

Me: But that won’t work if someone steals your phone, will it?

Eva: Not if they actually have the device, no.

Me: Do other people complain to you about the annoyance factor?

Eva: If someone is proactively doing this, and they haven’t actually experienced painful victimization, the hassle factor feels a lot worse. Victims view it differently because they’ve been through the incredible life-altering hassle of having to clean up their credit or their identity because a thief has been misusing it.

Me: What about the credit bureaus trying to sell you paid services?

Eva: They let you lock and unlock your credit. It’s similar to a freeze, and it has the same protections, but it’s not mandated by law like the freeze is. You can get your credit reports for free from www.annualcreditreport.com.

Me: Help me understand the terms.

Eva: A freeze is like a credit lock. The freeze is free, and the lock is a service offering. They claim that it’s more convenient and user friendly, and they charge for that.

A free fraud alert is something you can sign up for where your credit is still open and accessible. But they have to do an extra step of due diligence. You should get a notification. They should be calling your phone or sending an email saying, “Hey, did you open this new line of credit?” Not, “May we open this?” but, “Did you do it?”

For you, you’re pretty torqued about this inconvenience factor, the fraud alert may be a better option for you. It’s not as strong, but you don’t have to lift a freeze when you want to open new lines of credit.

Me: You’ve actually convinced me to go back and not be so stubborn. I’ll go put this stupid thing back on. I’ll let you win this.

Eva: I want you to be protected.

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