Credit Freezes May Not Protect You From ID Thieves
CHICAGO (CBS) -- You may have had your personal information exposed along with 143 million others as part of that Equifax data hack. And, you probably froze your credit to protect yourself.
But, now we're learning that could be a false sense of security - ID thieves can still get you. CBS 2's Dorothy Tucker investigates how it happened to one man who was part of that data breach and thought he did everything right.
David Lewis put a freeze on his accounts at every credit bureau.
"Thinking my credit was safe, my identity was protected and that nobody would be able to get a credit card in my name", said Lewis.
But, an ID thief did get a credit card in David Lewis' name at a Mundelein Home Depot, and quickly rang up big bills at that store and two others in Lake County.
The grand total, said Lewis: "I owe them $6200.48 for purchases I never made".
Lewis immediately contacted Fortiva, the company that sent him the bill and a new Home Depot Home Improver Card. He asked Fortiva, "How were you able to issue a card in my name?"
The answer surprised him.
"They said it wasn't their decision to issue a credit card. It was Home Depot's decision to issue a credit card," Lewis said.
This was actually the second Home Depot credit card the thief applied for. The first was denied because of a block on Lewis' credit file with Equifax. In this case the freeze worked, but it failed when Fortiva got involved.
Fortiva's main business is what's called "second look" financing. It basically gives credit to people with less than perfect credit scores, but the real David Lewis has a near perfect score and does not understand how this happened.
"You froze it because you don't want credit cards opened, yet they're still able to do that", said Lewis.
Here's how a credit freeze works.
It prevents new accounts from being opened by companies you don't do business with, but it allows those companies to get information to send promotional offers. Companies you have a relationship with can review your file.
That may be a loophole in the credit freeze system, because it's unclear what transpired between Fortiva and Equifax concerning David Lewis. His credit report shows Fortiva first contacted Equifax on May 26, and two days later the new account was opened.
"That's troubling", said State Representative Greg Harris (D-Chicago) who pushed for a new law that makes credit freezes free for everyone in Illinois. "I think we may have found a loophole in consumer protection laws that we need to close really quickly."
Even more troubling? It's happening elsewhere.
We searched records from the Consumer Financial Protection Bureau and found two similar cases this year in Georgia and Texas.
"We're trying to figure out what do we need to do to respond to it to protect people", said Harris.
After calls by CBS 2, Home Depot and Fortiva erased the fraudulent $6200 debt.
Fortiva removed the account from Lewis' credit file.
Equifax called this a unique situation and said it has taken appropriate steps to ensure it won't happen again.
David Lewis doesn't think he'd have gotten these results if he'd been working alone.
"I don't think that would have happened if it wasn't for channel 2's involvement in the process," he said.
Lewis remains concerned something similar could happen to others. He is asking, "Is this the start of a new wave of identity thefts?"
Illinois Attorney General Lisa Madigan launched an official investigation into Fortiva after we brought this case to her attention. Harris said he is looking into whether state laws can be strengthened.
Mundelein police tell us they do have the Home Depot surveillance video and are looking into other leads to find the ID thief.
To protect yourself, Illinois Public Interest Research Group still suggests that you put a freeze on your credit. Be sure to check your credit regularly by getting your annual free credit report from each of the credit bureaus. You can also pay for a credit monitoring service.
