Topic: Security freezes and the FCRA

[nekom]

I haven't been able to find an answer to this anywhere so I figure perhaps someone here can help.  Let's say a you have a security freeze on a consumer credit reporting agency, in this case chexsystems.  You subsequently apply for a product and chexsystems discloses the file regardless of the freeze.  The latest report from them shows both the security freeze AND the inquiry.  Has chexsystems violated the FCRA?

[maylaur]

I was under the impression that a security freeze was to stop anyone from accessing without your consent.  By applying for a product (if it's a product that requires a credit check), you gave consent.

[Doctor Evil]

maylaur, you're no fun.

[maylaur]

maylaur, you're no fun.

   Did I beat you to it for once?  *L*

[nekom]

I was under the impression that a security freeze was to stop anyone from accessing without your consent.  By applying for a product (if it's a product that requires a credit check), you gave consent.

I was under the impression (perhaps mistakenly so) that a security freeze would not allow access to anyone with whom you did not have a previous business relationship, period.  Many have said that if you freeze one of the big 3, you will be declined for credit applications based on the fact that it is frozen, or alternatively some creditors will pull a different non-frozen report if able.  Of course companies with which you have an existing business relationship (i.e. current creditors) are not stopped by it.

But again, I could be dead wrong.

[Mischievous Smurfy]

i think it violates ....

the entire purpose of a freeze is to prevent identity theft by restricting access to the credit profile so that no further accounts will be opened by an imposter.... that way either the creditor will not open an acount because of the freeze or will be on alert of potential id theft and not open the account.

they provided the profile in spite of the freeze which makes the freeze moot.

[maylaur]

I went and looked into a little more earlier today, and what I found basically says that the security freeze stops access to your credit file unless or until you remove the freeze completely or for a particular individual/entity, which takes a bit of time - generally at the very least 24 hours but sometimes several days.

[nekom]

Does anybody know exactly what section of the FCRA the concept of a security freeze is listed under?  Can't seem to find any mention of it.

[itsmeagain]

From ChexSystems website:

You have a right to place a “security freeze” on your consumer report, which will prohibit a consumer reporting agency from releasing any information in your consumer file without your express authorization.

Please be advised that security freeze requirements do not apply to pre-screening inquiries made by creditors who may want to offer pre-approved credit or demand deposit account information service companies. A demand deposit information service company is one that issues reports regarding account closures due to fraud, substantial overdrafts, ATM abuse, or similar negative information regarding a consumer, to financial institutions for use only in reviewing a consumer request for a demand deposit account. For this reason, the information contained in your consumer file at ChexSystems may continue to be provided under certain circumstances. Security freeze requests submitted to Chex Systems, Inc. will be applied only to your ChexSystems  consumer report. If you wish to restrict access to your credit report at the major credit bureaus or other consumer reporting agencies, you must contact them directly.

https://www.consumerdebit.com/consumerinfo/us/es/chexsystems/securityfreeze/index.htm

So, (see highlighted section above), if you are applying for a checking or savings account, the freeze does not apply.

There are also specific state rules listed at the site link above.  Some states allow a private right of action, some don't.  You should visit the link and look at your specific state rules.