A recent warning from the Internal Revenue Service raises the question of when it is wise to consider placing a security freeze on your credit files.
The IRS warning focused on a bogus e-mail intended to fool taxpayers into believing they were under investigation by the agency's criminal division.
The scam tries to entice people to click on a link or open an attachment. If either one is opened, culprits get remote access to the person's hard drive with the ultimate goal of obtaining personal and financial information that could be used to commit identity theft.
Because so many people are victimized by these scams or are having their personal information compromised, many states have enacted laws that allow consumers to tightly control who has access to their credit files. These laws prevent credit bureaus from releasing information from someone's files without their express consent - a security freeze.
While a security freeze provides great protection, you need to think carefully about whether to implement one. With a security freeze, lenders and businesses can't get access to your credit file and so aren't likely to issue new credit. You can, however, lift the freeze temporarily. But it can be time-consuming. The process may require a fee, generally about $10, and it can take up to three business days.
To implement a freeze, you will have to send a certified letter to each of the three major credit bureaus.
At the beginning of the 2007 legislative session, 17 states were considering adding security freeze laws, according to Consumers Union. But by the time many of those legislative sessions wrapped up, only nine legislatures - Arkansas, Indiana, Maryland, Mississippi, Montana, New Mexico, North Dakota, West Virginia and Wyoming - had passed such laws, bringing the total of states with security freeze laws to 35, plus the District of Columbia.
Kansas allows victims of identity theft to implement such a freeze.
For information about various state laws, go to www .financialprivacynow.org, a Web site set up by Consumers Union. Click on "Learn More." Then look for "States With Security Freeze Laws." You also will find a link to instructions on how to place security freezes on your files.
I went to the Web sites for the three major credit bureaus and couldn't easily find security freeze information. You have to type "security freeze" in their search engines. And when you do go to the sites, don't be discouraged by grave warnings that a security freeze will interfere or prohibit the timely approval of vital credit. Certainly it will slow down the credit approval process.
But you know what? Perhaps the delay and expense in lifting and reinstating the freeze will have two effects. It will block you and identity thieves from easy credit.