Testimony: Support Security Freezes on Consumer Reports

Rich Jones, director of policy and research at the Bell, testified to the Senate Judiciary Committee in support of security freezes on consumer reports. 

The Bell Policy Center supports HB18-1233 to allow parents and guardians to request security freezes be placed on the consumer records and reports of protected consumers free of charge. It also allows guardians to impose temporary freezes or partially lift freezes free of charge for consumers under age 18.

This is a good first step in helping consumers protect their most sensitive information and reduce the likelihood of identity theft. Sealing off the records of children will limit the ability of thieves to steal their names and identities and use them to commit fraud without anyone noticing. It also clearly delineates the power of guardians to protect the consumer credit records of other, older protected consumers. 

The recent Equifax data breach, in which thieves stole the names, Social Security numbers, birth dates, and addresses of 147.9 million Americans — an additional 2.4 million victims were identified only last week — affecting over half of U.S. adults, makes abundantly clear the need to better protect our most sensitive data.

Related: CFPB Forced Arbitration Rule Protects Consumers

A tempting target for hackers and thieves is personal data on minor children and others who may not have existing credit records on file or who are not actively seeking credit. Thieves can use this data to create a fake persona and use it to commit fraud without anyone noticing. If you are old enough to have a Social Security number, you are old enough to have your identity stolen. It may be years before a person applies for credit only to find his or her identity has been stolen, leaving behind unpaid bills and loan defaults.

Security freezes are the most effective way to protect your child and prevent identity theft according to Chi Chi Wu, staff attorney at the National Consumer Law Center.  Once the account is frozen, a new account in that person’s name cannot be opened unless that individual or their representative requests it be “thawed.” “It’s the single most effective step you can take to prevent identity theft,” says Wu.

Many states have acted to specifically allow parents and guardians of young children and other protected consumers to request credit security freezes on their children’s accounts.

We also like the fact that the credit freeze proposed in HB18-1233 applies to protected consumers who are older. Given the growing number of Coloradans who will be over 65 in the coming decades, it’s important we provide protection for all consumers who are most vulnerable to fraud.

The Bell Policy Center supports HB18-1233 and urges you to vote yes on it. We thank Senator Fenberg and Senator Gardner who brought it today.

If you have any questions, or if I can provide further information, please contact me at (303) 297-0456, ext. 224, or jones@bellpolicy.org

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