If you have ever been a victim of identity theft, you probably already know how hard it can be to vindicate yourself and your credit file. Identity theft cases can drag on for years and haunt victims for decades. It’s reported by the Consumer’s Union that up to 10 million Americans fall victim to identity theft a year. With a current population of 303,544,231 that makes 3.2% of the population certain to face identity theft this year. Another report by Gartner banking security analyst Avivah Litan, puts the number for 2007 higher, at 15 million identity theft victims. More information produced by Gartner says that identity theft cases will be up 50% from 2005. Total financial losses due to identity theft in a year is estimated at about $50 billion every year.

In these cases of fraud, about one-third of the identity theft cases use social security numbers and other personal information obtained from unprotected sources. Out of all of these cases, the most consumers were able to salvage was cleaning up their credit report, financial losses and repair their tarnished image. Not too long ago, it was only these victims that were offered something that could protect them from future fraudulent activity, a credit freeze. Many states started to mandate that credit bureau’s allow identity theft victims to protect their credit reports with a credit freeze that would force approved authorization upon access.

Since 2005, a large amount of the states in the US started to pass state laws allowing any consumers to put a credit freeze on their report with all credit bureaus. Listed below are all thirty nine states, as well as the District of Columbia that passed security freeze laws: Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Indiana, Illinois, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.

As the movement towards a nationwide available credit freeze moved closer, the credit bureaus repeatedly lobbied Congress to try and stop credit freezing. In fact an organization called CDIA or Consumer Data Industry Association spent close to $1.4 million in federal lobbying to fight credit freeze laws as reported here. CDIA has been lobbying against credit freeze laws for the three credit bureaus: TransUnion, Equifax and Experian. The credit bureaus wanted the federal government to put a stop to state laws allowing credit freeze options on consumer’s credit reports.

The reason becomes clear as to why the credit bureaus want the laws put to rest, when you see the amount of money the credit bureaus are making from their reporting. The big three credit reporting agencies issue billions of credit reports every year for consumers applying for all types of credit. This creates annual revenues of around $4 billion every year for all three credit bureaus. It now becomes clear why the CDIA has spent $1.4 million lobbying against the credit freeze laws.

Consumers can have a sigh of relief as of November 1st, 2007. All three credit bureaus gave into security freeze options for all states, including the 11 states without laws, before they all forced it by mandatory laws.

Now that the security freeze is available to everyone, here is how it works: Once a security freeze is desired a consumer needs to write a letter to each credit bureau and pay a fee of about $10 for each bureau. Once the freeze is in place, it prevents the big three credit bureaus from releasing information without the consent of the consumer.

A consumer can allow access to their credit report to either a specific business or organization, or they can choose a specific amount of time they want their credit report to be available without authorization. When a consumer freezes their credit report they are given a unique PIN that is used to lift the security freeze. Lifting a security freeze is also referred to as thawing your credit report.

While it sounds easy enough to allow access to your credit report after a freeze, it is not yet free. Thawing your report can cost you anywhere from $10 to $12 for each credit bureau. The fees are currently up for debate in some states. Currently consumers in Indiana are now able to request, thaw and remove a credit freeze for free. Nebraska and Delaware have made it possible for consumers to only pay to place a freeze on their report but remove it for free. Other states are now requiring credit bureaus to limit their fees to $5 and under. If you want to find specific information on your state, fees and laws you can visit the Consumer Union’s website at FinancialPrivacyNow.org.

One issue that is still being debated besides the fees involved in credit freezing, is the amount of time it takes to freeze and unfreeze a credit report. Credit bureaus have made public statements that they plan to lift a credit freeze within three business days once they have received a request to do so. However, as with the fees, some states are now forcing the bureaus to lift the freezes as quick as 15 minutes.

While there are still many issues, regulations and debates to be worked out on the consumer credit arena, consumers can celebrate that laws and regulations are currently moving in their favor. Identity theft is only expected to keep growing as databases continue to amass large quantities of consumer data and share it. With the growing use of private data, consumers can now step up to the plate and be in control of their credit privacy and security.

Have you been a victim of identity theft? Have you frozen your credit report yet? Do you think this is the solution to consumer’s identity theft problems or just a bunch of government red tape? We’d like to hear from you at our submission form. If you want to speak your mind or you are involved in the Credit Reporting Industry or have had any good or bad experiences with credit and want to speak your mind we want to hear from you. Tell us your story and thoughts at our submission form.