Despite one complaint, it’s still worth putting freeze on credit reports

A faithful reader followed my advice and placed a security freeze on her credit reports. She doesn’t want her name used, but it’s a common one, and she thought she’d done the right thing and protected herself and her husband from identity theft by limiting who could check their credit reports.

She felt more secure, until their auto insurance premium showed up.

Apparently, her insurance company ran a check on her credit to find out her Financial Responsibility Score to see whether her rates should go up, or even down. When blocked from accessing her credit information, the company increased her premium — almost $1,400.

She sorted it out, but it took 20 days, countless phone calls, and considerable aggravation. She used www.gethuman.com to find a real person to talk to at both her insurance company and the credit bureau because that was one of her major hassles.

Now California Casualty tells her she’ll need to thaw the security freeze every year so her insurance company can make this check.

She wanted me to warn readers about this.

Her experience was a fluke and apparently a mistake by her insurance company. By law, her insurance company should have had access to her credit report because she had a pre-existing relationship, and shouldn’t need to lift the freeze every year.

This is the only complaint I’ve received so far since recommending in August 2006 that people place security freezes with the three major credit bureaus if they don’t want to get a lot of new credit.

The paperwork can be obtained from Claudia Collins, associate professor of aging issues at the University of Nevada Cooperative Extension. If you contact her at collinsc@unce.unr.edu, she can e-mail the documents back. The alternative is to call Heidi Petermeier at 257-5588, and she will mail you the documents you can complete and send to the credit bureaus.

If you’re 65 or older, the security freeze is free.

Not yet a senior citizen? Then it costs $30 or $10 for each of the three major credit bureaus — Experian, TransUnion and Equifax. They each have Web sites providing more details of how to request, lift or remove a security freeze.

Security freezes aren’t for those who like lots of credit cards and will open one to save 10 percent that day.

If you’re going to buy a car on credit, you’ll need to thaw the freeze. Landlords, employers, and utilities can’t access your credit reports if the freeze is on.

Want to take 12 months to pay for furniture? They won’t extend that offer if they can’t see your credit.

Collins, who created the forms for people to send to the bureaus, said her office received between 5,000 and 6,000 requests for the forms as a result of my column, and this is the first complaint.

Collins recently lifted the freeze so she could get another credit card and found the process easy. The credit card company told her which credit bureau to contact. She did, and arranged for the freeze to be lifted for 24 hours and gave the credit card company a code number so that only that company could check the report.

My reader didn’t have that easy an experience. However, Rajat Jain at the Nevada Division of Insurance said this is the first complaint of its kind he’s heard about.

“Most of the process is automated. There’s very little human interaction, and an error can occur at any point,” he warned.

When you mail those documents to the credit bureaus, because they contain so much personal information, Jain recommends using certified mail to protect the information.

Collins remains a strong advocate of the security freezes to prevent identity theft, and so does Consumer Reports.

Despite this one complaint, Collins said it’s easier to lift the freeze a few times a year, even at a cost of $10 a thaw, than it is to deal with the hassles of identity theft.

If you don’t get confirmation from the credit bureaus themselves that the freeze is on, then something has gone awry and you need to follow up.

Lastly, do what I say, not what I do. Collins vows she’ll stop talking to me if I don’t follow through with my own security freeze.

Jane Ann Morrison’s column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call (702) 383-0275.