Law allows credit data freeze

North Carolinians now have another way to prevent identity theft thanks to a new state law.

Starting this month, people can place a security freeze on their credit report to prevent thieves from illegally opening new accounts or obtaining credit in someone else's name.

The law allows consumers to tell national credit bureaus to forbid potential creditors from checking their reports. When creditors cannot get access to the reports, they deny approval for credit, thwarting potential thieves from using someone else's personal information.

By placing a security freeze on a credit report, consumers will be notified by credit agencies each time a credit report is requested.

The security freeze is free to identity theft victims who have filed a police report. Others must send certified letters requesting the freeze to each of the three national credit bureaus, which can charge up to $10 for the service.

Last year, North Carolina consumers reported about 5,600 cases of identity theft, according to the Federal Trade Commission, the country's consumer protection agency. The General Assembly passed the Identity Theft Protection Act last summer to try to reduce that number.

The new law also requires businesses to destroy customers' personal identification information that is no longer needed. And it requires businesses to notify customers if personal information is stolen. In addition, it limits government collection of Social Security numbers and mandates agencies to protect the Social Security numbers they collect.

Consumers should take their own steps to minimize the risk of identity theft, according to the Federal Trade Commission.

First, people should obtain their credit report to see whether any unknown accounts have been illegally opened in their name or under their Social Security number. Federal law requires that major consumer reporting companies provide people with a free copy of their credit report once a year.

Consumers should also ask banks to request that passwords be used for credit cards, bank accounts and phone accounts. People should avoid creating passwords using easily available information.

Lastly, ask about security procedures at your office, doctor's office or other businesses.

And, if in doubt about your own records, such as checks, bank statements or bills, buy a shredder to dispose of them.