New Vermont law allows residents to freeze credit reports

• Vermonters who become the victims of identity theft can stop the financial bleeding by putting a freeze on their credit reports, under a new state law.
• "Identity theft is a big problem, getting bigger, both here in Vermont and nationally," said Attorney General William Sorrell, whose office pushed for the law as part of a package of identity theft protections last year.
• Identity thieves operate typically by illegally taking such things as a person's Social Security number, address, credit card number or bank account number and then using that information to obtain illegal loans, credit lines or the purchase of goods and services under the stolen name.
• "One of the biggest headaches that identity theft victims have to deal with is cleaning up the damage done to their credit records when crooks open new accounts in their names," said Susanna Montezemolo, a policy analyst with Consumers Union.
• Julie Brill, an assistant attorney general who worked with lawmakers on the legislation, said the original proposal from Sorrell's office was for consumers to place a freeze on their credit if they wished even before they become victims to identity theft.
• Lawmakers went for the less aggressive measure, which is similar to laws in several other states, Brill said.
• When a consumer invokes a credit freeze, a company looking to extend credit to that consumer is blocked from running a check with the three major credit rating companies that operate in the United States.
• Some retail and banking groups have warned that credit freezes effectively block not only thieves, but consumers who have activated them, and that it can take a couple of days to unfreeze a credit report if and when the consumer wants to take out a new credit card, get financing for a new car or do a similar transaction.