Why a credit freeze won’t stop all identity theft attacks on consumers

Most data breach disclosures in the United States explain what information was leaked and any protective steps available to consumers.

At the federal level, the Federal Trade Commission advises that after a breach involving sensitive personal information, consumers may consider setting up a personal profile Credit freeze To help prevent new credit accounts from being opened in their name.

Many people freeze credit and assume they are protected. But credit freezes are not a comprehensive barrier against identity theft. It stops most new credit applications, but it doesn’t prevent abuse of your Social Security number or account takeovers.

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A credit freeze restricts access to your credit report, which can stop most new credit accounts from being opened in your name. (Felix Zhan/Phototec via Getty Images)

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What a credit freeze actually does

A credit freeze, also called a security freeze, restricts access to your credit report at Equifax, Experian, and TransUnion. Under federal law, freezing is free. When a freeze is in place, most lenders cannot access your credit file to evaluate applications for new credit cards or lines of credit. If the creditor cannot see your credit report, the application will usually be denied.

You can manage your credit freeze with each bureau individually. With Experian, for example, you can log into your free account online at Experian’s credit freeze page and then perform, lift, or schedule a thaw; You can also call Experian toll-free (888-397-3742). If you plan to apply for credit, you must lift the freeze in advance.

A credit freeze blocks most new accounts that require a credit check. It doesn’t extend beyond your credit file.

Some identity protection services offer a credit lock feature that allows you to restrict access to your credit file through a mobile app. Like a freeze, it can limit new credit checks. The main difference is convenience, as you can usually quickly turn it on or off without logging into the office’s website or calling on the phone.

A credit freeze cannot stop all forms of identity theft

A credit freeze blocks new credit accounts, but it doesn’t stop many common forms of identity theft that don’t require a credit check.

• Account takeovers: If someone has access to an existing credit card or bank account, they don’t need to open a new line of credit. They can change the email address, phone number, or mailing address associated with the account and start charging fees.
• Tax identity theft: A fraudulent federal tax return does not require a credit check. If someone files a return using your Social Security Number (SSN) before you do, the IRS may reject your legitimate filing.
• Recruitment fraud: If your Social Security Number (SSN) is used for employment, it will not appear as a credit inquiry. Alternatively, the earnings may be recorded under your Social Security record.
• Government benefits fraud: Unemployment insurance and other state-administered benefits do not require a traditional credit check.
• Medical identity theft: The stolen identity can be used to obtain… Medical treatment. Bills may not appear until the provider sends the account to collections.

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Identity theft, such as tax fraud, account takeovers, and abuse of government benefits, does not require a credit check. (Istock)

What happens when fraud doesn’t involve a credit inquiry?

When identity theft occurs outside of the credit approval process, there is no automatic reversal. Each category of fraud is handled by a different agency or company.

• If a fraudulent tax return is filed, you must work directly with the IRS and file Form 14039, Affidavit of Identity Theft. The IRS may request identity verification before releasing your refund.
• If your Social Security Number (SSN) was used for employment, you must contact the Social Security Administration to correct your earnings record.
• If government benefits are fraudulently claimed in your name, the government agency is involved. There is no federal clearinghouse.
• If the medical debt shows up in collections, you must dispute it with both the provider and the collection agency, often in writing.

There is no single agency coordinating these corrections. You are responsible for identifying fraud, filing appropriate reports, and tracking responses across agencies.

If freezing isn’t the end, what is?

A credit freeze addresses the risks associated with new credit applications. Identity theft often goes beyond that. Typically includes comprehensive identity protection Credit monitoring Across all three main offices, alerts for new inquiries or accounts, and monitors exposed personal information such as social security numbers, driver’s license numbers, passport details, email addresses and passwords.

Some services also monitor public records, address changes, identity verification activity, and even suspicious financial transactions when you link accounts. Early alerts can help you spot fraud before it spreads.

If identity theft occurs, the recovery process can be complicated. Some identity protection plans provide access to fraud resolution specialists who help contact creditors, set fraud alerts, dispute unauthorized accounts, and prepare required documentation. Many also include identity theft insurance to help cover eligible recovery expenses, such as lost wages or legal fees.

No service can prevent all forms of identity theft. But layered monitoring, rapid alerts, and targeted recovery support can make damage easier to contain and resolve.

See my tips and top picks for the best identity theft protection at Cyberguy.com.

Key takeaways for Kurt

When fraud occurs outside of your credit file, you should work directly with each agency to correct the damage. (Leonie Asendorpf/Image Alliance via Getty Images)

A credit freeze is a smart move after a data breach, but it’s only one layer of protection. Many forms of identity theft don’t involve a credit check, which means it can happen quietly and take time to fix. True protection comes from understanding vulnerabilities, monitoring your accounts, and acting quickly if something appears to be wrong. The more proactive you are, the easier your recovery will be.

Have you placed a credit freeze, and did you know that it does not protect against all types of identity theft? Let us know your thoughts by writing to us at Cyberguy.com.

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