Arizona consumers could soon have a new weapon against identity theft.
Without dissent, the Senate Committee on Financial Institutions and Insurance voted Monday to require credit reporting agencies to honor requests by consumers to “freeze” release of their reports to outsiders.
The net effect would be that anyone who gets an individual’s name and Social Security number would not be able to use that information to get a credit card or make purchases in the other person’s name.
The bill also sets up a procedure in which each credit bureau would furnish those who have had their credit frozen with a personal identification number.
Consumers then could use that PIN to call the reporting agency if they decide they want to buy something and need a credit report released to a merchant.
And the credit agency would have to unfreeze the report within 15 minutes.
All this, however, does not come free: Each freeze or unfreeze would cost $5. And to fully protect themselves, consumers would need to have their reports frozen at each of the three major credit reporting agencies: Experian, Equifax and TransUnion.
Sen. Amanda Aguirre, D-Yuma, sponsor of the legislation, said she is proof this can happen to anyone.
“I was the victim of identity theft last year,” she said. “I was surprised by a phone call at my house letting me know that somebody was ... purchasing goods on my name with my credit card.”
The measure, which now goes to the full Senate, requires a reporting agency to put a freeze on an individual’s credit within 10 days of getting a written request from a consumer. Each agency then would have another 10 days to confirm the freeze, also in writing, and provide that PIN.
To ensure the freeze doesn’t unduly stop someone from shopping, the legislation would require a credit agency to remove the freeze within 15 minutes after getting a request by phone, Internet or any other electronic method; unfreeze requests that come in the mail have to be acted on within three business days.
A freeze won’t totally seal off an individual’s credit report. For example, companies that hope to get consumers to take new credit cards would still be able to “prescreen” prospective customers by reviewing their credit reports and determining who should — and should not — get an application.
But no card could actually be issued to someone whose credit report is frozen.
It also would not stop insurance companies from checking someone’s credit report. Some companies use an individual’s credit score to determine how much to charge them for automobile and other kinds of liability coverage.