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How to Protect Your Financial Identity and Credit

According to the Federal Trade Commission, several million people are victims of identity theft each year, generating losses estimated in the tens of billions of dollars. Several states, including Illinois, California, New York and Florida, have passed laws that will help reduce the occurrence of this type of theft. On May 24, 2006, Governor Blagojevich signed Senate Bill 2310 (815 ILCS 505/2MM) into law, which allows Illinois residents to place a security freeze on their credit reports. A freeze requires your permission to release your credit report to a third party. The bill also requires a personal password to release the freeze. This Illinois law is effective as of Jan. 1, 2007. Previous law only allowed former victims of identity theft to freeze their credit and further required a police report verifying the claim. Before placing a security freeze on your credit, you should consider other legitimate uses of credit reports beyond granting credit. For example, a security freeze mighty delay getting a new cellphone, utility service or certain government licenses. Illinois residents can call the Illinois Attorney General Office's Identity Theft Hotline toll free at 866/999-5630 for more information.

How to place a freeze on your credit

Illinois residents can place a security freeze on their credit report by sending written requests by certified mail to all three major consumer credit reporting agencies. The consumer credit reporting agency must activate the freeze within five business days and will charge a fee of $10 for the activation or release of a freeze. This fee is waived if you are already an identity theft victim. After the freeze is activated, the consumer credit reporting agency must notify the individual within 10 days of the freeze and provide the individual with a password or personal identification number and instructions to release the freeze. The freeze can either be permanently or temporarily released by contacting the appropriate credit reporting agency and specifying to whom your credit report can be made available or the time period in which it should be available. The fee for a permanent or temporary release is $10. Once the request has been received by the consumer reporting agency, the agency must release the freeze within three business days. This will require the use of your password or personal identification number.
Major consumer credit reporting agencies:

Equifax Security Freeze
P.O. Box 105788
Atlanta, GA 30348
800-685-1111
www.equifax.com  

Experian Security Freeze
P.O. Box 9554
Allen, TX 75013
888-397-3742
www.experian.com  

TransUnion Security Freeze
P.O. Box 6790
Fullerton, CA 92834-6790
888-909-8872
www.transunion.com  

What the letter to the consumer credit reporting agency should include

The letter should include:

• The individual's full legal name
• Social Security number
• Date of birth
• Current and former addresses for the last five years
• Two proofs of residence (copy of driver's license, utility bill, bank statement, etc.)
• You must include a payment of $10 made payable to the credit agency
   

Templates available online

Click on the links below for assistance in implementing a credit freeze:

• Request for credit freeze template
• Credit freeze instructions

Best practices to safeguard your identity

Individuals should continue to shred copies of bank statements, credit card bills, utility bills, investment statements and any other documents that contain personal and/or financial information. Paper records at home or in your office should be locked in a fireproof file cabinet or a safe. Computer systems with private information should be secured. Laptops and PDAs should not store Social Security numbers, passwords, bank and brokerage account numbers and other personal information as they are frequently lost or stolen. If you decide not to freeze your credit, you might want to consider the credit monitoring services offered for a monthly fee by all three of the major consumer credit reporting agencies. This service would alert you to key changes in your credit status within 24 hours. You would then need to take action to stop any further fraud. In summary, be vigilant in protecting your identity and personal information.

Proposed legislation

A bill is currently on the United States House of Representatives floor titled, Financial Data Protection Act of 2006 (H.R. 4127), which would actually revoke the ability to freeze your credit unless you have already been a victim of identity theft. While the bill is on the voting calendar, it is unknown when a vote will actually take place.

Questions regarding identity theft?
Contact Mark Blumenthal at 312-980-2917.
Contact Micah Wheat at 312-980-2949.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.