What happened when I went to do a credit freeze……

Recently, I went to visit my grandmother. She is nearing ninety, sharp as a tack and financially savvy. She manages her own investments (and those of other family members), and has a keen grasp of marketplace trends. As our talk turned to my work, the recent Equifax breach came up.

Following the Equifax breach, our office has been recommending that folks consider placing a security freeze on their credit reports. A security, or “credit” freeze on your credit reports doesn’t affect your accounts, but it prevents any new accounts from being opened with your information. A security freeze is the most effective way to prevent unauthorized accounts. However, it’s not something most folks think about on a regular basis, even those who pay close attention to their finances and credit.

I asked my grandmother if she had placed a security freeze on her credit reports, and was unsurprised to learn that she had not. So, I offered to help my grandmother set those up, thinking that I would also gain some useful insight into the process I could bring back to my daily conversations with Vermonters as they struggle to respond to the breach.

We decided to try, first, to set up the freezes online. We logged on to the Consumer Assistance Program website, where I knew we could find links to the credit bureaus’ freeze pages in the Equifax information we have posted there. I launched a new tab for each, and we began entering the information they requested.

For all of these, some sensitive information is required. You will need to enter your Social Security Number. If you are not comfortable doing that online (which we totally understand), then you may wish to call the credit bureaus on the phone, or write to them through the regular mail. Once that information is entered, they will proceed to ask a number of questions to try and verify that you are, in fact, yourself.

A battery of questions about my grandmother’s past addresses, credit accounts and relatives came up. These were multiple choice questions, and sometimes confusing. We had to think carefully about each question, as a wrong answer would prevent us from completing the process. Some questions offered answer options that were all unrelated, and we had to be sure to select “None of these” where no answer was accurate.

After we got through these questions, we were able to submit the request. In three out of four, we successfully placed the freeze. One of the four (TransUnion), would not proceed, and required us to call an automated telephone line. We called the number, and completed the freeze process on the phone in just a few minutes.

Some folks may find that they cannot complete any of these online requests. You may have to send in what seems like a lot of supporting documents (like utility bills, mail, copies of ID, etc.). This is likely because there may be conflicting information, and the credit bureau wants to make sure you are who you say you are.

This process isn’t easy, but it is important. If you find you are having difficulty getting through the process, or have questions, give our office a call (800-649-2424). We may not be able to come for a visit, but we are happy to help!

-Jason, CAP Program Coordinator

How did they get that? Credit reporting and your personal information…

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In the wake of the massive breach of consumer information at Equifax, many people are asking how, and why, Equifax has so much information about so many of us. One of your first questions might be something like:

“I have never been a customer of Equifax; how can they have any of my personal information?”

Many consumers may never have even heard of Equifax before, let alone been a customer of their consumer services. So how could so many have been affected?Equifax is one of a few national companies that collect and report consumer credit information. These companies, often called “credit bureaus” or “credit reporting agencies”, get regular reports about your credit history from banks, financial institutions, landlords, utilities and even employers. The credit bureaus then put all of this information from different businesses about your use of credit together into a single file — your “credit report”. Some of the bureaus have developed a scoring system to rate how “safe”, or how “risky” your credit habits may be, compared to other consumers. Any time you apply for a loan, credit card, utility account, etc., the lender will get your credit report from one or more of these bureaus. Using the credit report, the lender will review your credit history to decide whether to open an account for you, and what interest rate they wish to charge (often based upon the perceived “risk”).

The credit bureaus also supply information to companies for marketing purposes. If you have ever received an invitation to apply for a credit card in the mail, or other kinds of solicitations like that, it is likely the sender got your mailing address from a credit bureau. Marketers buy mailing lists from the credit bureaus that are tailored to meet their desired customer characteristics. For example, a credit card company may wish to market a new travel credit card. They might contact the credit bureau to buy mailing lists of people who have other travel cards, airline accounts, etc., and who may meet certain age, income or other demographic criteria.

With so much of our personal, sensitive financial information at their disposal, you may wonder how these credit bureaus are regulated. There are some specific laws, both federal and state, that govern how credit bureaus should report, manage and protect your information. The federal Fair Credit Reporting Act (FCRA) sets out such standards as the rights of consumers to dispute items on their credit report, security requirements, and more. Vermont’s Consumer Protection Act includes a subchapter on Fair Credit Reporting that requires, among other protections, that a company get your consent before they can access your credit report. Both federal and Vermont state law require each of the credit bureaus to provide you with a free credit report each year (meaning you can get two from each bureau, each year). There are also specific laws that require companies to keep sensitive personal information as secure as possible, and to report to law enforcement and consumers quickly if they discover a breach of those security measures.

It is likely that policy-makers in the state legislatures, Congress and regulatory agencies will be reviewing the current laws and rules in place to protect consumer information, considering the scale of the breach at Equifax. If you have concerns or thoughts about the current law, you may wish to contact your legislators to discuss these issues and keep up to date on any proposed changes. Our office will be active in these areas, and will be working to keep Vermonters informed throughout. If you have questions about consumer protections, or a complaint about a business that you would like assistance with, contact our consumer hotline, or file a complaint online.