What follows is a useful article from the Wall Street Journal for those looking for ideas to add a little more distance between yourself, or family members, and credit fraud. The headline is a little misleading – this strategy can apply to people of all ages.
For my own purposes, I am sharing this article with my two daughters as a way to educate and get their buy-in. Full disclosure: my wife and I use credit freezes. It helps me sleep a little bit better each night.
Please forward to anyone you feel might find value in this message.
Rich Arzaga, CFP®
YOUR MONEY: Wall Street Journal Dec. 28, 2018
A new law requiring credit bureaus to offer you free freezes applies to children, too. It’s easier than you’d expect, but you may still have questions. Here are some answers.
You can now freeze your child’s credit files for free — and it isn’t as difficult as even the most cynical among you might expect it to be.
Do you remember what it was like trying to maneuver through the credit bureaus’ systems after the Great Equifax Hack of 2017? Many people seeking credit freezes spent hours (or days!) fighting their way onto websites that were not built for moments of mass panic. Some of those folks had to pay fees to protect their own information, which was galling.
Thanks to a new federal law, free credit freezes are available to everyone from your infant to your great-grandmother. And on the first day that kiddie freezes (and here, kids are 15 and under) were mandated, I froze the files of my two daughters just to see how badly things would go.
To my surprise, the experience wasn’t bad at all. But I had some questions for the credit reporting companies, and I tried to anticipate the things that might confuse you, too.
What’s a credit freeze?
When you have a credit freeze with the major bureaus — Equifax, Experian and TransUnion — most companies can’t look at your credit record unless they are already doing business with you. This has the effect of icing out a thief who’s trying to get a credit card in your name, since the card company won’t open the account unless it can check your credit first.
Do I really need to do this for any offspring as well?
It’s a good idea. Thieves can find a way to use your children’s credit files for their own nefarious purposes, just as they can with yours. Most people aren’t in the habit of monitoring their children’s credit, which gives thieves more time to do their work. Plus, kids tend not to have black marks in their credit files yet — another enticing feature for thieves.
Many adults don’t like the inconvenience of having to temporarily thaw their credit files whenever they want to get a car loan or take advantage of a sign-up bonus for a new card. But this isn’t a factor for children, making their freezes less onerous.
Children Credit Freeze Pages
So, what do I do to set up a freeze for a child?
Each of the credit bureaus has instructions on its website. Generally, the law requires companies to collect proof that you are who you say you are and that your child is really your child. This usually means mailing them copies of some combination of your child’s birth certificate and Social Security card, and your driver’s license and Social Security card.
If all goes well, a couple of weeks later you’ll get a note back confirming that the companies have frozen the files.
Wait, they want me to put copies of Social Security cards in the mail?
Yes. There is no electronic upload available for your documents, although an Equifax customer service representative named Richie tipped me off to a fax option (1-888-826-0598) if you think that’s a better option.
I didn’t like dropping copies of such sensitive documents into a mailbox, but I held my breath and did it anyway. An Equifax spokeswoman described the mail requirement as “industry standard.”
That doesn’t make it right.
An Experian spokesman acknowledged that it could make people uncomfortable and said handling the documents another way was “an area of opportunity” the company could explore. But he also said that plenty of people mailed these kinds of documents to the government, health care organizations and the courts, and that the company had a secure post office box that was not at risk for theft.
Equifax and TransUnion want us all to use an address on the envelope that includes the word “freeze” in it: “Equifax Security Freeze” and “TransUnion Protected Consumer Freeze.” That seems to essentially invite identity thieves to pick out these envelopes first if they get their hands on a mailbag, given the likelihood that essential documents would be inside. Maybe “Steal this envelope!” would be more appropriate.
I blew off the instructions just to see what would happen. My kids still got their freezes.
Just to be sure, I circled back to Equifax and TransUnion about the addresses, and both companies say your request won’t be misdirected if you leave “freeze” out of the address. They will still process your request.
I have more than one child. Can I just toss their documents in one envelope?
It wasn’t clear to me, either, so I tried it both ways with different bureaus — separate envelopes to two and one envelope to the third — and both approaches worked. The companies confirmed that putting everything in a single envelope is fine.
Experian and Equifax both have forms they want you to fill out, so complete one for each child. Then, for all three bureaus, write a clear-as-day cover letter explaining how many files you are seeking to freeze. Don’t forget to include all of the documents needed for each child in the envelope.
My child is over 15 but under 18. Does that matter?
Yes. You may think of your 16-year-old as a minor, but adulthood arrives early in credit land, as soon as you turn 16.
Here’s how I’d handle a request for a 16-year-old. Go to the adult freeze sections of the bureaus’ websites and try to request a freeze there. You’ll probably be told that your teenager does not have a credit file yet and that you’ll have to mail in much or all of the same identifying information that you would have to send if your child were 12.
If you have a 16-year-old and a 12-year-old, figure out the situation with the 16-year-old first. If you can request an adult freeze online, great. If not, you can do all the photocopying and licking and stamping and cover-lettering in one fell swoop for both kids. But in that case, I’d use two envelopes. One is coming from an “adult” who may need to send the documents to a separate post office box or address.
How can this turn into a giant fiasco? There must be a way.
The quickest way to make a hash of your neatly frozen files is to misplace the personal identification number that the credit bureaus give you. You will need to provide the PIN when temporarily or permanently thawing your own file or when your child wants to do it some day many years from now.
So, don’t lose the PIN. You can get a new one, but it might take weeks.
I did it! I can stop worrying now, right?
Nope. Thieves can still take control of your accounts, or find ways to impersonate you to steal your income-tax refunds, or use your information to get free medical care.
But credit freezes are the best tool we have to protect ourselves and our children from many kinds of identity fraud. Given how imperfect the security systems are that protect our data from the bad guys, I see no reason not to take advantage of free tools that can make us all a little bit safer.
Ron Lieber is the columnist and author of “The Opposite of Spoiled.” He previously helped develop the personal finance web site FiLife and wrote for The Wall Street Journal, Fast Company and Fortune.