TransUnion Freeze Plan Looks Good, But…Say Activists

Consumer activists had a mixed response to the announcement yesterday by TransUnion that it will allow consumers to put a national “freeze” on their credit file, the first of the big three credit bureaus to offer such a program.

TransUnion announced that a victim of identity theft could add, lift or remove a freeze on access to their credit file for free on a nationwide basis. Non-victims would pay $10 to add, lift or remove a national credit freeze under the program from TransUnion.

The Chicago-based consumer information house said in a statement that file freezes today “are driven at the state level, [but] some state-enacted laws are not yet effective and other states have not enacted such laws.”

Activists applauded TransUnion for taking the step but questioned its motives.

“Half the states have already passed laws and Congress is seriously considering a national law,” said Travis Plunkett, legislative director of the Consumer Federation of America.

Indeed, 37 states and Washington, D.C. have adopted laws that allow citizens to put a freeze on their credit files, according to ConsumersUnion.org. States allow the three major credit bureaus—Experian, Equifax and TransUnion­­—to charge from $5 to $10 to initiate or lift a freeze, according to Consumers Union.

A TransUnion spokesperson said it didn't discuss the program with Equifax or Experian.

Some states limit the file freeze capability to consumers that have been the victims of identity theft. Freezes are typically designed so a crook can’t open a fraudulent account using information like a Social Security number garnered through identity theft.

Plunkett wonders if TransUnion may believe it is getting ahead of an inevitable national law on credit freezes. The spokesperson said it implemented the program for consumers in states that haven't yet enacted freeze laws. 

Still, give them an 'A' for the idea, said a spokesperson for the Center for Democracy and Technology. “Generally we support the tools the credit industry can give consumers to control their own information. These tools are important and welcome.”