Watching Your Wallet: Only 3% of consumers freeze credit after data breach

According to a new study by the Identity Theft Resource Center, Americans know about credit freezes but rarely use them.

The research was published by the nonprofit DIG.Works. It found only 3% of surveyed consumers actually froze their credit after receiving a data breach notice.

“We’ve got a lot of work to do to improve both the system we use to notify people and get them to take actions that would be protective of themselves,” said James Lee, COO of the Identity Theft Resource Center.

Lee said the research shows people understand that credit freezes are free, but there’s still a perception it’s difficult. Many people believe credit monitoring services are enough to protect them.

“It has a place, but it also gives you a false sense of security because credit monitoring stops nothing,” Lee said. “It tells you the horse has left the barn, so you can go look for it. Only a credit freeze can keep that horse from ever getting out.”

Credit freezes are the only thing that can prevent a new account being opened in your name. It stops anyone trying to apply for benefits in your name.

To start a credit freeze you need to contact all three credit bureaus. It does not cost anything, and Lee said it does not hurt your credit.