Will a credit freeze prevent my credit card company from increasing my credit limit?

June 18, 2014 22:42 by Consumer Ed

Dear Consumer Ed:

If I place a credit freeze on my credit report, will it prevent a credit card company from increasing the credit limit on my credit card?

Consumer Ed says: 

A credit freeze will prevent most parties from accessing your credit report or credit score, but it probably wouldn’t prevent your current credit card company from increasing the credit limit on a card that you obtained prior to putting the credit freeze in place.

Credit freezes, also known as security freezes, are regulated on a state-by-state basis.  Georgia law allows consumers to place a security freeze on their credit reports by sending a request in writing to a credit reporting agency.  Generally, a credit freeze prevents credit reporting agencies from releasing your credit report or credit score unless you first remove the freeze by providing your password.  There are, however, exceptions to this general rule. 
   
One of these exceptions is for companies with which the consumer has a pre-existing account, contract, or debtor-creditor relationship for the limited purposes of reviewing the active account, or collecting the financial obligation owing for the account.  Your current credit card company is an example of this.  Therefore, your credit card company and its employees will be able to view your credit report for the purpose of reviewing your active account.  Your credit provider would likely make a determination of whether to increase your credit limit from the information it gathers from this review.  This exception also means that putting a credit freeze into place wouldn’t prevent your credit card company from increasing the credit limit on your card.

If you’d like to put a credit freeze into place, you should send a written request to all three of the major credit bureaus—Experian, Equifax, and TransUnion--because different credit issuers may use different credit bureaus.  Your request should include the following information:

  • Full name (and former name if applicable)
  • Current address and former address if it changed in the last 5 years
  • Social Security number
  • Date of birth
  • Photocopy of a driver’s license, state ID card or other government-issued identification
  • Proof of current residence, such as a copy of a phone or utility bill
  • If you are a victim of identity theft, include a copy of either the police report; investigative report, or complaint to a law enforcement agency concerning identity theft;
  • Georgia residents who are not victims of identity theft and are under age 65 should include payment by check, money order or credit card in the amount of $3.00.  Do not send cash in the mail.


You can contact the credit bureaus at the addresses below:


Experian Security Freeze
P.O. Box 9554
Allen, TX  75013
1-888-397-3742
https://www.experian.com/freeze/center.html

Equifax Security Freeze
P.O. Box 105788         
Atlanta, GA  30348  
1-800-685-1111
https://www.freeze.equifax.com

TransUnion LLC
P.O. Box 2000
Chester, PA 19022-2000
1-888-909-8872
www.transunion.com/personal-credit/credit-disputes/credit-freezes.page

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Can a company pull credit report when you reload a gift card?

April 22, 2014 21:49 by Consumer Ed

Dear Consumer Ed:

I attempted to reload a restaurant gift card. After providing my credit card number, expiration date and 3-digit code, I was then prompted with three questions: The street number of my residence on a street that I lived on several years ago, the type of residence I live in on my street, which was given by name, and what street I have lived on in the past out of 4 choices. The processor must have accessed my credit report. Is this legal? 

Consumer Ed Says:

Yes, this is likely legal under the Fair Credit Reporting Act, as well as the terms and conditions of the gift card that you used.

The Fair Credit Reporting Act (FCRA) limits the manner (and the reasons) in which a consumer's credit report may be accessed. The Act is designed to protect the privacy of consumers' information, and to guarantee that the information supplied by credit reporting agencies is as accurate as possible. Under the FCRA, there must be a permissible and legitimate purpose for a business to check your credit report. For example, a business may access your report if you are applying for credit and it needs to check your creditworthiness, or if you already hold an account with a business and it needs to determine if you continue to meet the terms of the account.

A business can also access your report if it has a legitimate need for the information in relation to a business transaction that you initiate. In your case, by using and then reloading the restaurant gift card, you can be said to have initiated a transaction with this business. The business may have obtained this information about you in order to verify your identity before completing the transaction. As long as the information is not misused or mishandled, identity verification of a consumer helps to stop fraud and identity theft, and may be deemed to be for a legitimate purpose. 

Additionally, the terms and conditions of the gift card you purchased may give the business the right to check your information. Often in those terms and conditions, a business will expressly retain the right to access information about you for identity verification and for fraud prevention. If your gift card is subject to such a provision, then when you began to use the gift card you may have given the business permission to check your personal information, and to verify your identity.

If you still have questions about how or why the business accessed your information, you could try the following:

 

  • Check the terms and conditions of the gift card you purchased to see whether you have authorized the business to check your information; or   
  • Ask the company directly how they obtained your information and what steps they take to ensure your private information is protected.

 

If you aren't satisfied with the business' response to your questions, or feel they are misusing your personal information, then you can always simply take your business elsewhere. 

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How can I protect my children from identity theft?

March 6, 2014 20:43 by Consumer Ed

Dear Consumer Ed:

I really want to protect my children from identity theft.  At what age should I check to see if they have a credit report and whether it contains any suspicious information?

Consumer Ed Says:

Most parents apply for their children's Social Security numbers (SSN) very soon after their children are born, and a SSN is all that's required to open most credit accounts.  Therefore, it's never too early to take steps to protect your children from identity theft.  You should contact each of the three credit reporting companies, Experian, Equifax, and Transunion, to request your children's credit reports so that you can examine them for fraudulent activity.  When you contact each company, ask for a manual search of your children's files.  The companies may require copies of the children's birth certificates, Social Security cards, your government-issued identification cards, and proof of address.  You can contact the companies by visiting their websites:  www.experian.com, www.equifax.com, and www.transunion.com.

In addition to getting your children's credit reports from the three credit reporting agencies, there are additional steps that you can take to protect your children from identity theft:

 

  • Keep all documents that contain your children's personal information safely locked up. 
  • Avoid carrying your children's Social Security cards with you.
  • Do not share your children's SSNs unless you know and trust the other party.
  • If someone asks for your children's SSNs, ask why they want them, how they'll safeguard them, how long they'll keep them, and how they'll dispose of them. If you're not satisfied with the answers, do not share the numbers, and ask to use other identifiers.
  • Before you share personal information on the internet, make sure you have a secure connection.  A secure website has a lock icon in the address bar and a URL that begins with "https."
  • Also, use strong passwords, and keep them private.  If you use a password to sign into a website, log out of the site when you're finished.
  • Use a computer with updated antivirus and firewall protection. Don't send any personal or financial information through an unsecured wireless connection in a public place.
  • Limit the chances that your children's information will be stolen or misused at school by finding out who has access to your children's personal information.  Also, read the notices that schools are required to send explaining your rights under the Family Educational Rights and Privacy Act (FERPA).  That law protects the privacy of student education records, and gives you the right to opt out of the release of directory information to third parties, including other families.
  • Safely dispose of personal information.
  • Be alert to phishing scams, where criminals send an email, text, or pop-up message that looks like it's from a legitimate organization.  A phishing message asks the recipient to click on a link or call a phone number, and to share personal or financial information.
  • Share all of these safety tips with your children, especially if your children use the internet.

 

You should begin looking into the possibility that your children are victims of identity theft if you or your children have experienced any of the following warning signs:

 

  • You or your children were turned down for government benefits because the benefits are being paid to another account using one of your children's SSNs;
  • The Social Security Administration, Internal Revenue Service (IRS), or some other government agency asks you to confirm that your children are employed, even though your children have never had jobs;
  • You or your children received a notice from the IRS saying the children didn't pay income taxes, or that the children's SSNs were used on other tax returns; and/or
  • You or your children received collection calls or bills for products or services you didn't purchase or receive.

 

If you know or suspect your children have been victims of identity theft, contact each of the three credit reporting agencies.  Explain that your children are minors, and cannot legally enter into any type of contract.  To prove that your children are minors, send the credit reporting agencies a completed copy of the Uniform Minor's Status Declaration (make sure you ask each company for its mailing address).  Next, send a letter to each credit reporting company. Ask them to remove all accounts, account inquiries, and collection notices from the credit files associated with your children's names or personal information.  It won't be a quick process, but it shouldn't take more than 90 days from the date you get an acknowledgment of your request.

For more information, visit the Federal Trade Commission's website at www.consumer.ftc.gov/articles/0040-child-identity-theft.

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