The Limitations to a Credit Freeze: Why Freezing Your Credit Doesn’t Prevent Identity Theft

While a credit freeze might help keep your identity safe, it certainly doesn’t prevent all forms of identity theft. Instead, it’s simply one defense you can take.

There are many forms of identity theft that have nothing to do with your credit report.

Two examples include:

  • Tax fraud, where someone uses your Social Security number to file a fraudulent tax return and steal your refund,
  • Medical identity theft, wherein a thief steals your personal information in order to get medical treatments.

Again, a credit freeze is simply only one defense against identity theft.

There’s a common misperception that a credit freeze will completely prevent identity theft, which isn’t the case. It does help prevent some new accounts requiring a credit check from being opened — not all new accounts require a credit check — but it doesn’t safeguard the accounts you already have open.

Say an identity thief steals a piece of your outgoing mail that contains a check you wrote to pay a utility bill. A thief could certainly wreak financial havoc using that information.

That’s why Suzanne Ford, the lead restoration advocate for LibertyID, suggests you use a secured mailbox, otherwise you run the risk of someone stealing mail that contains a check they could wash and cash.

“All they need to do is take a picture of your check and they can start counterfeiting it. You can do checks by phone all over the place,” said Ford, who stopped writing checks around 25 years ago in favor of automatic bill pay.

Ford is a big advocate of taking a look at how you live and what changes you can make to decrease your chances of becoming a victim. You can read our Six Recs on How to Prevent Becoming an Identity Theft Victim here.

While there are things you can do to lessen your risk of identity theft, it’s an unfortunate reality for an ever-increasing number of Americans. According to Javelin’s 2017 Identity Fraud Study, $16 billion was stolen from 15.4 million U.S. consumers in 2016, compared with $15.3 billion and 13.1 million victims a year earlier.

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