Financial Privacy & Security News

Olympia—By a vote of 47-2, the Washington State Senate passed a bill yesterday sponsored by Senator Jean Berkey (D-Everett) that will allow victims of identity theft to place a security freeze on their credit reports to prevent identity thieves from gaining access to their personal information. Originally, the bill would have allowed anyone to put a security freeze on their credit report, but it was weakened in the House to apply only to victims of identity theft. The bill will now go to Governor Gregoire for her signature.

"It is a little disappointing that the House chose to weaken a good bill that passed with strong bipartisan support in the Senate," said Robert Pregulman, Executive Director of WashPIRG. "Nonetheless, the bill will give Washington consumers an important device for mitigating, and even preventing the effects of identity theft on themselves and their families, and we urge Governor Gregoire to sign it."

ESB 5418 will allow consumers to lock identity thieves out of their credit files with a security freeze. With a security freeze in place, a consumer's credit report and credit score cannot be shared with any potential creditors unless the consumer decides to unlock the files by contacting the credit bureaus and providing a security code.

A security freeze can help prevent identity theft because most businesses will not issue new credit or loans to an individual without first reviewing his or her credit report or credit score. If an individual's credit file is frozen and an imposter applies for credit in that individual's name, a creditor will likely deny the imposter's application, thus preventing an instance of identity theft. In addition, if a request for credit is made on a frozen account, then the credit bureau would be required to notify the consumer about the attempted fraud.

People who choose to freeze access to their credit report may temporarily lift the freeze for new loans and credit they apply for themselves. When a consumer initially activates the freeze, the credit bureau will issue a unique PIN to the consumer that can be used to "thaw" or lift the security freeze for a particular creditor. Credit bureaus must release the report within three business days of such a request. Existing creditors will continue to have access to an individual's credit report.

"It seems that every day there is another report about identity thieves hacking into a database and stealing personal information," concluded Pregulman. "Washington citizens now have the right to put a security freeze on their credit files so they can stop identity thieves in their tracks."

Four states other states have enacted security freeze laws - California, Louisiana, Texas, and Vermont. California and Louisiana laws allow anyone to place a security freeze on the credit reports. Vermont and Texas only allow victims of an identity theft crime to enact a freeze. ESB 5418 is stronger than laws passed in Vermont and Texas as it also allows anyone whose personal information that has been stolen to enact a security freeze.

WashPIRG is a nonprofit environmental and consumer protection group with over 20,000 members in Washington. For more information, go to www.washpirg.org.