Florida's credit freeze law protects Sunshine State consumers
Florida residents have a new way to give identity thieves the cold shoulder. A new state law that went into effect on July 1, 2006, gives consumers more control over who can take a look at their credit reports.
Floridians who sign up for a "security freeze" with a consumer credit reporting agency can prevent identity theft by making credit account information inaccessible to vendors checking credit history. The Credit Freeze Bill, sponsored by State Rep. Sandy Adams (R-Orlando) helps people, including senior citizens, who unknowingly become the victims of identity theft and must spend years fixing the damage to their credit.
Identity theft is a major problem in Florida and the rest of the United States. Based on a 2003 Federal Trade Commission study, identity thieves used their victims' personal information to strip 3.25 million Americans of accurate credit scores. In 2005, Florida ranked sixth in U.S. identity theft cases with 17,048 victims. By instituting the security freeze law, Florida joins 24 other states that also allow consumers to put a freeze on their credit reports. (To find out if your state is among them, see your state law.)
Adams' colleague Sen. Carey Baker (R-Eustis) also supported the security freeze legislation. He explained that too often victims of identity theft are unaware that a criminal has applied for a loan or a credit card in their name. He noted that the new law lets Florida consumers freeze their credit report, so that a credit card company would have to first inform them if someone tries to apply for credit in their name. Then, the individual would need to verify that the application is legitimate.
Under the new law, residents would be able to "unfreeze" their accounts for any transactions they decide to make, such as a car loan, and then "freeze" it back once they are done, Baker stated.
According to the law, consumer credit agencies are only permitted to release the frozen information when the customer's PIN number is provided.
Florida consumers looking to sign up for the security freeze need to request the service by informing credit agencies such as Equifax, Experian and TransUnion via certified mail. A $10 fee is charged each time the individual activates, removes, or temporarily lifts the freeze -- although this fee does not apply to victims of identity theft. Additionally, senior citizens 65 years of age and up do not have to pay to freeze, or permanently lift, their credit freeze. However, the fee still applies if they choose to temporarily suspend the credit freeze, such as to make a major purchase.
During the legislative session, the bill gained active support from AARP Florida, which expressed pleasure that the bill passed. AARP Florida noted that the security freeze empowers consumers to control their own credit information and protect their credit, adding that most victims do not know their credit scores have tumbled until long after crooks go on spending sprees at stores offering instant credit.
Baker went on to remark that the first thing an identity theft victim should do is to freeze their credit. He said that the credit freeze represents a good option for those who do not use credit very often. Still, he cautioned that the security freeze might not be for everyone, including consumers who make a great deal of purchases on credit cards or apply for loans, since there is some bureaucratic red tape involved that could result in some inconvenience. Baker recommended that residents evaluate their personal situation to decide if a credit freeze is right for them.
Published: November 14, 2006
- Debt buyers may get exemption from collection rules – The U.S. Supreme Court heard arguments Tuesday on whether companies that buy debt should be exempt from consumer protections that apply to debt collectors ...
- Can a prenup or postnup save you from a spouse's debt? – They are not foolproof, but they certainly put you in a much better position ...
- Supreme Court inflicts blow on credit card surcharge ban – State laws that block merchants from slapping surcharges on credit card users were dealt a blow by ruling that they affect free speech rights ...