Really, must we all go back to cash-only to protect our personal information?
In the past several years, millions of consumers have been put at risk of identity theft as their personal information has been either stolen from or left unprotected by the companies that collect it. The latest data breach involves TJX Companies Inc., which operates the T.J. Maxx and Marshalls retail stores.
So what can consumers do?
Well, we can press our state lawmakers to enact legislation that would greatly reduce access to our credit files. I'm talking specifically about a way to put a "security freeze" on our credit reports.
A security freeze blocks all access to your credit reports and credit scores. This is better than a fraud alert, which simply advises that you may be a victim of identity theft. With an active fraud alert, lenders can still access your file. However, with a freeze, consumers control access to their credit files.
A security freeze prohibits, with certain specific exceptions, the credit reporting agency from releasing your credit report or any other information without your express authorization.
With a security freeze, if lenders or businesses can't get access to your credit file, they aren't likely to issue new credit. This greatly reduces the ability of a thief to open a credit account in your name.
There is a downside to a security freeze: It can make it harder for you to take advantage of instant credit offers. In addition, to temporarily remove a freeze and to reactivate it later, you may have to pay a fee. Fees vary by state, but generally it's $10.
Twenty-six states - including Kansas - and the District of Columbia have adopted laws that allow consumers to freeze access to their credit files to prevent crooks from opening fraudulent accounts with stolen information, according to Consumers Union, which has been tracking these laws.
Many security freeze laws became effective last month. For more information on existing state security freeze laws go to www.financialprivacynow.org, set up by Consumers Union. Click on "Learn More," and look for "States with Security Freeze Laws."
Among the states with security freeze laws, five give consumers the right to put a freeze on credit files only after they become identity theft victims. Those states are Kansas, Hawaii, Texas, South Dakota and Washington.
As more people become victims of identity theft, it's time to expand the security measures we use.
Security freezes have been described as putting a deadbolt on your front door.
Given the frequency of consumer credit information breaches, we need a stronger lock on our credit files.