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Link of the Day – New Texas Law Helps Guard Against ID Theft

The Dallas Morning News recently reported on a Texas law that went into effect September 1, 2007. In a nutshell, consumers can now freeze their credit reports without so much hassle as before. One effect of freezing your credit report is to prevent identity thefts from gaining credit in your name. Since the potential creditor cannot check your credit history, the creditor most likely will not approve a credit request. Here are excerpts from the story:

Previously, Texans couldn’t freeze their credit reports unless they were victims of identity theft, which was ridiculous – you had to wait for a crime to occur before you could take steps to protect yourself.

Now, Texas joins 34 other states that allow consumers to freeze their reports without first having to be victims of identity theft.

It’s about time. Texas law was out of step with the speed and sophistication with which identity thieves operate today.

People should be allowed to freeze their credit files as soon as they discover that their personal information has been exposed.

“It’s one of the most proactive measures a consumer can take,” said Linda Foley, co-executive director of the Identity Theft Resource Center in San Diego, which monitors and studies identity-theft issues.

“It’s like putting your credit report in a safe deposit box for which you and the credit reporting agency has keys,” she said.

Freezing your credit report is different from putting a fraud alert on your credit file.

A fraud alert is a less restrictive option and doesn’t block viewing of your credit report. The fraud alert is a special message that a credit issuer receives when checking a consumer’s credit rating. It tells the credit issuer that there may be fraud involved in the account and to contact you before granting credit in your name.

That doesn’t always ensure protection because not all creditors are diligent in making a true effort to contact you.

“While there is a law that requires issuers to honor this request, some credit issuers do not obey the law,” according to a fact sheet on credit freezes and fraud alerts by Ms. Foley’s group. “We find fraud alerts work about 70 percent of the time.”

A fraud alert stays on your credit report for 90 days unless you’re a victim of identity theft and have submitted a police report to extend it to seven years.

But a credit or security freeze stays in your file until you authorize it to be lifted.

To freeze your credit report, you must send a notice by certified mail to each of three national credit bureaus – Experian, Equifax and TransUnion.

You’ll need to include proof of your identity, such as a copy of your driver’s license, a state or military ID card.

Credit bureaus may charge up to $10 for the security freeze, except for victims of identity theft, who don’t pay anything.

The bureaus have five business days to freeze your credit report and 10 business days to send you a confirmation letter, which will include a personal identification number and toll-free telephone number to call to lift the freeze.

You can tell the credit bureau to lift your freeze temporarily or to allow only certain creditors to view your credit report.

The charge to lift your credit freeze temporarily or to permanently remove it can’t exceed $10. The charge for allowing only a certain creditor to view your credit report can’t top $12.

The credit bureau has three business days to temporarily lift the freeze.

Understand that a credit freeze isn’t for everyone.

“If someone is the type who uses instant credit or builds up credit cards, a freeze is not the right thing for you to do,” Ms. Foley said.

“It’s going to take three days to thaw. The world of instant credit is closed to you.”

The best way to use a credit freeze is if, say, you have an elderly parent whom you want to protect. You can encourage him or her to lock others out from his or her credit report.

The change in Texas law is significant because consumers now can head identity thieves off at the pass and deprive them of using a consumer’s credit report for a shopping spree.

Still, much more needs to be done to protect consumers from identity theft.

The law still isn’t able to keep up with identity thieves, who have become increasingly nimble and sophisticated at what they do.

It’s become a cat-and-mouse game: For every new protection the good guys throw up, the bad guys find a way to get around it.

But lawmakers, employers and consumers can’t let up.

  • Legislators should write laws that make common sense and that would truly give consumers a sharp weapon to protect their good name.
  • Companies must do a better job of guarding sensitive financial information. There have been too many cases where customers’ Social Security numbers, credit card numbers and other valuable information have been found in the trash intact.
  • Consumers need to be stingier with their privacy. Don’t give out your personal information – particularly your Social Security number – freely.


“A freeze is the best form of financial identity theft protection currently available, but it is by no means a guarantee of safety,” Ms. Foley said. “However, for many of us, the freeze not only brings peace of mind but gives us some measure of control of our financial security, especially with an unstoppable identity thief in your life.”

Bob Kraft

I am a Dallas, Texas lawyer who has had the privilege of helping thousands of clients since 1971 in the areas of Personal Injury law and Social Security Disability.

About This Blog

The title of this blog reflects my attitude toward those government agencies and insurance companies that routinely mistreat injured or disabled people. As a Dallas, Texas lawyer, I've spent more than 45 years trying to help those poor folk, and I have been frustrated daily by the actions of the people on the other side of their claims. (Sorry if I offended you...)

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