Universal Access to Freezing your Credit Report: Not

With the list of states passing legislation enabling freezing of credit reports growing to 39, Trans Union, Equifax and Experian have decided to provide credit freeze services to everyone in the United States. The cost of the freeze will range from $5 to $10 per credit bureau.

The methods for freezing your credit report are in flux as state specific mandates are gradually replaced with US wide services. Many hope to see a simple, universal, secure, fast and low cost method, hopefully on the Web or via Phone, in the near future [See below 'Universal Credit Freeze Service: IMO Make it Mobile']. A single secure point of contact would be the best strategy, but currently in the age of the internet and phones that can act as a credit card, you will need to write a letter, sent by certified mail, which includes your name, address, proof of current address, date of birth and social security number. You will need to include the fee, which differs between states due to the patchwork of legislation. Alternate methods are being introduced, for example TransUnion now supports a telephone service. Go to the website for each credit bureau, as the requirements seem to be changing very rapidly and this would prevent you from sending this very sensitive information to the wrong party.

Tools for Preventing Identity Theft

Freezing your Credit Report is a powerful tool to prevent identity theft. Yet, it is not a credit protection device you should take lightly as it does limit you ability to obtain new credit.

You can use a number of different tools to prevent someone from opening new accounts or making loans in your name. These three are the most popular.

Freeze Credit Report

Credit Monitoring

Fraud Alert

Universal Credit Freeze Service : IMO Make it Mobile

Universal and simple access to freezing your credit report is still a work in progress. This is not a technical challenge. When a person can rent a video for $1.50 at Safeway using a credit card, handling low cost, high speed, secure transactions are clearly the credit bureau's bread and butter. The holding of private information by a third party, which the customer then can setup a secure, authenticate, safe and simple on/off switch may take a bit more web work, but again, it is not that impossible. The challenge may be more of the credit bureaus rethinking their business models. Currently the bulk of their revenue is from assessing risk, giving out credit reports and providing credit scores. This is a very important function and helps keep the wheels of commerce going. A credit freeze stops the credit bureaus business in it tracks. This is most likely the reason why the consumer has seen such a slow, simplistic and expensive process. With the introduction of credit freezes throughout the United States, a tipping point has taken place and we are now on the other side of that hill, gaining momentum. Web or Phone based credit freezes are either in the works or have already been announce. The reason is national legislation in this area is probable, so the market will respond. Let's take a moment and outline some basic features of this future credit freeze service.

Universal Credit Freeze Service

Mobile Security Freeze

Having some real concerns for protecting your credit, you have frozen your credit report. Now your are out shopping, so how do you unfreeze your credit. This means the service needs to be mobile, secure, personal, private and cheap. TransUnion has introduced a voice service, but voice service is not enough security, can be overheard in a crowded store and it does not handle all three credit bureaus. What we need is a mobile service, that contacts all three services and lifts the credit report freeze (aka security freeze) but does not require that you reveal your private information while at the store counter. So let's walk through the steps. First, we need a simple name that everyone can remember, like Credit Freeze or Security Freeze. Security Freeze is a bit more universal and may apply to new services in the future. Next a domain name must be secured for the mobile device, let's say SecurityFreeze.mobi. A simple port of this webpage onto http://SecurityFreeze.mobi shows the robustness of the latest smartphones. These new phones, with much more powerful browsers are able to provide a very professional looking customer experience.

Secure Mobile

Mobile phones are getting more secure all the time. Callback services that dial you back and then request a password or pin are simple and universal and are much more secure that simple passwords. More advanced biometric keys are being deployed on the some of the latest phones giving those that need it an extra level of security. The idea is to have the customer design the level of security they need. Keep it simple for most people, but build bigger security walls for the customer if they deman it. Again basic security cheap or free, better security provided for a fee.

Knows your Name: Authentication

This answers the question: 'You are who you say you are?'. Right now this involves a letter to the credit bureau. Authentication could be much simplier, especially if it is pooled rather than through snail mail. Basic authentication for most people with advance authentication for a fee. Again, this may be as simple providing proof of address in a letter or as complex a biometric identification. The level of risk as defined by the user would determine the level of authentication.

Low Cost Ticket

The basic service can be very low cost. Once the consumer account is setup, the cost per transaction can be more like buying a latte or even mailing a letter rather than going to a movie. Fee based services which match the risk preferences of the consumer can act as the revenue generator, with basic transactions funding the core infrastructure.

Time to Innovate or Legislate

Credit Freezing services which are match and customized to the consumer can act as a whole new revenue model. The move late in 2007 towards access to credit freezing services throughout the United States is only the first step. With national legislation coming down the road, less innovative approaches may be put into law, with high fees and low service. This would be a great time to do what we do best: think, design, build and act. It would be better to innovate, rather than legislate. What we have seen to date high fees, slow response times and snail mail. With 39 states already passing legislation in this area, national legislation is perhaps a forgone conclusion. A simple, inexpensive mobile service for credit report freezes could offer the right mix of usability and security.

[IMO = in my opinion]