- Okay, once upon a time,
(gentle music)
there were three cute little consumer credit bureaus
named TransUnion, Experian, and Equifax.
For the most part, they were introverts.
They loved their role behind the scenes
where most consumers barely knew they existed.
They were the invisible gatekeepers of credit,
and they relished their role of silently judging you
for your spending habits and debt repayments.
They even graded you and gave you a score,
but they didn't do this for free.
No, contrary to commonly held beliefs,
these credit bureaus were still,
and still very much are for profit companies.
They charged people to see their credit score.
They charged people to freeze their credit.
But worst of all, they sold all of this credit information
to any company or individual
who had a permissible purpose to ask for it.
Yes, Jayden?
- Dad, what is permissible purpose?
- Well, didn't you read
the Fair Credit Reporting Act section 604
that I gave you yesterday?
- Yeah, but it wasn't very clear.
- Exactly.
Okay, now where was I?
Ah, yes.
(relaxing music)
Reporting agencies are for-profit companies.
Remember that, okay?
Well, one day in July of 2017,
a small problem was discovered at Equifax.
It was nothing too big or important,
just one of those pesky cyber attacks.
Equifax had been dragging its feet updating its systems
and hackers were able to access consumer records
for 76 days.
(dramatic music)
You serious?
Maybe this was big and important.
In fact, the data for an estimated 147 million US citizens,
15.2 million UK citizens, and 19,000 Canadian citizens
had been compromised.
Are you serious?
Well, two months later,
Equifax admitted they had been breached
and their stock price dropped.
Lawsuits were filed.
All of the sudden these invisible gatekeepers,
these silent credit score judges
had a big spotlight on them
and when consumers got a view of who they really were,
what they saw wasn't pretty
and Equifax had to pay a huge settlement
for that class action lawsuit.
Well, US Congress was pressured to act
and in 2018 they passed a law
that said that these credit bureaus
couldn't charge consumers to freeze their credit anymore.
And that was a big deal.
These consumer credit bureaus used to charge consumers
five to $10 a month for a credit freeze,
so now they were losing a valuable income source,
but that's not all, these credit freezes
also limit a credit bureaus ability
to sell consumers' data to new lenders.
They loved making money selling consumer data,
which includes name, addresses, phone numbers,
credit history, age, estimated income.
Oh my goodness, that's a lot of data.
Well, when you put a credit freeze on your account
and everybody has an account, whether they like it or not,
that includes you, and you, and you,
not only does it severely reduce the risk
of your identity being stolen,
it also stops these credit bureaus
from making money by selling your data.
They're not allowed to.
Oh no, poor credit bureaus.
(somber music)
How would they survive?
Well, they thought and they thought,
and they came up with a plan.
"How about we offer free fraud alerts?" They said,
"Or perhaps we can work with banks
to offer free credit locks."
(upbeat music)
This was a very good plan indeed.
By using terminology that consumers could understand
with great ease, they could easily convince them
to choose an alert or a lock instead of a freeze,
and unlike a freeze, an alert or a lock would still allow
Experian, TransUnion, and Equifax
to make money off your data.
(children cheering) Brilliant!
Executives across the three credit bureaus
high-fived each other with joy.
So the moral of the story, in case you couldn't tell,
is that credit bureaus make money on the data they sell.
No service or protection can offer 100% guarantees.
The best option is not an alert or a lock,
but a free credit freeze.
I hope you enjoyed
that entertaining story time with my boys.
If you wanna learn more about what a credit freeze is,
how you can easily set it up, and even remove or thaw
that credit freeze, head over to the website
AllThingsSecured.com/Credit-Freeze.
I think it's important to state this again.
A credit freeze is not a foolproof solution
for identity theft
and Krebs on Security has already proven that.
But I do think there's no good reason not to do it
unless you're already monitoring your ID
with something like Identity Guard,
which is something that I use,
or LifeLock or many other services.
It's not gonna affect the way that you use your credit cards
or any services that already use your credit,
it's just gonna stop new credit poles,
new credit in your name.
And that's a good thing.
I mean, if you wanted to go out and buy a new car,
all you have to do is call them up or go online
to remove that credit freeze,
and by law, they have to do that within the hour.
It's really fast.
A side benefit here
is that you won't impulsively sign up for a new credit card
when you're checking out at your favorite retailer,
which you probably shouldn't be doing anyway.
Anyway, learn more about a credit freeze here,
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and privacy tips here on All Things Secured.