Thousands of Canadians fall victim to identity theft every year, and as a result, some have even lost their entire savings. With emerging technology, hackers are getting better and better at accessing your personal data. Luckily, a credit freeze is a great preventative measure in stopping fraudsters from creating false credit accounts in your name.
Find out if you can place a credit freeze in Canada.
Things You Should Know About A Credit Freeze In Canada
- A credit freeze prevents access to your credit report to help protect you from fraud.
- Currently, credit freezes are only available to residents of Quebec.
- Alternatives to credit freezes are available to protect yourself from fraud, such as credit monitoring and fraud alerts.
What Is A Credit Freeze In Canada?
Also known as a security freeze, a credit freeze prohibits the credit bureau from sharing your credit information or personal data when a lender or creditor tries to access it.
So, if a fraudster steals your information and tries to open a new credit account in your name, they’re unlikely to succeed as the lender won’t be able to properly vet them.
Credit freezes are especially important during data breaches. If a bank, financial service provider, or even the CRA experiences a data breach, you might be at risk for hackers and fraudulent activity.
Unfortunately, however, credit freezes don’t stop fraudsters from accessing your existing credit accounts altogether, or from conducting any other credit activities that don’t require a credit check.
Can You Place A Credit Freeze In Canada?
Yes, you can place a credit freeze in Canada; however, you can only do so in one province: Quebec.
Equifax and TransUnion, the two major credit bureaus in Canada, are able to put credit freezes on your account voluntarily but aren’t required to. Legislation would be needed to enforce credit freezing.
Right now, such legislation is only enacted in Quebec. All other Canadian provinces and territories haven’t yet introduced legislation for credit freezes. This is despite the 218% increase in fraud in Canada between early 2020 and early 2021.
How To Place A Credit Freeze In Quebec
Thanks to the Credit Assessment Agents Act (Bill 53), as of February 1, 2023 credit freezes in Quebec are available. Quebecers can place a credit freeze (aka ‘credit lock’) for free with either one of the major credit bureaus, TransUnion and Equifax. The freeze must be done with each bureau individually.
How To Place A Credit Freeze With Equifax
You can place a credit lock through your Equifax account in the following ways:
| Online | Log in to your Equifax account to place a freeze on your report by following these steps: – Click the “Credit lock” in the menu bar on the left under “credit report”. – You’ll then be redirected to credit lock page. -Then click the big button “lock”. – You’ll be asked to confirm that you truly wish to lock your file. – Confirm by clicking the “lock” button. – You’ll be done and redirected back to the dashboard. |
| Phone | 1-866-828-5961 |
| By Mail | Send this form to: Equifax Canada Co. National Consumer Relations P.O. Box 190 Montreal, Quebec H1S 2Z2 |
How To Place A Credit Freeze With TransUnion
You can place a lock on your credit file with TransUnion in the following ways:
| Online | Log in to your TransUnion account |
| Phone | 1-800-663-9980 |
| By Mail | TransUnion Canada P.O Box 338, LCD1 Hamilton, Ontario L8L 7W2 |
How To Remove A Credit Freeze
To remove a credit freeze, you can contact the respective credit union the same way you do to put the credit freeze in place:
- TransUnion – To remove a credit freeze through TransUnion, you can do so online by visiting ocs.transunion.ca. You can also request the removal of a credit freeze on your credit report by contacting Transunion by phone or mail.
- Equifax – You can remove a credit freeze by accessing your online account. You can also call Equifax or mail them to request the removal of your credit freeze.
Benefits Of A Credit Freeze In Canada
A credit freeze is a relatively simple process that offers several perks:
Protects You From Fraud
A credit freeze makes it difficult for someone to fraudulently create a credit account in your name. For example, if an imposter pretending to be you applies for a loan, the lender won’t be able to access your credit information when they try to conduct a credit check. And, without that important credit information, a lender will likely not lend or authorize a new credit account to that unauthorized individual.
Free Of Charge
While a credit freeze is not available across Canada, it is available and free in Quebec. To comply with the Credit Assessment Agents Act, both credit bureaus in Canada are now legally required to offer credit freezes to Quebecers free of charge.
No Expiry
Once you successfully request a credit freeze, you can rest easy. Credit freezes don’t expire, so they remain in effect until you decide to lift them.
Doesn’t Affect Your Credit Score
Credit freezes don’t hurt your credit score or your ability to use your current credit accounts. Instead, a credit freeze may help protect your credit score, as it helps stop individuals from opening and using any credit accounts under your name.
Helps You Practice Restraint In Spending
A credit freeze might help you think twice before applying for too many credit cards. The time it takes you to lift the freeze might give you time to reconsider an impulsive decision.
Drawbacks Of A Credit Freeze In Canada
Make sure you consider the downsides of a credit freeze before putting one in place:
No Guarantee
Credit freezes aren’t guaranteed to be 100% effective in preventing scammers from opening new credit accounts in your name. Plus, there are other ways fraudsters can victimize you, such as stealing your credit card number. Additionally, credit freezes don’t help you protect credit accounts that are already open in your name.
Must Contact Each Credit Bureau
You must get in touch with each credit bureau to not only request a credit freeze but also to lift or delete the freeze.
Requires Planning For The Future
Credit freezes require planning. If you are thinking about opening a new credit account, such as a mortgage or credit card, you’ll have to plan for extra time in requesting a lift on the freeze.
Other Ways To Protect Yourself From Fraud
If you’re a Canadian and want to protect yourself from fraud but don’t live in Quebec, there are other actions you can take:
Sign Up For Fraud Alerts
You can sign up for fraud alerts with either Equifax or TransUnion. Having these alerts in place will ensure that you’re notified if there is any suspicious activity on your credit file. Both bureaus allow you to set up alerts to your phone or email.
If a lender sees a fraud alert on a potential borrower’s credit file, they are legally obligated to take reasonable steps in verifying someone’s identity before lending them money.
Protect Your Personal Information
Don’t overshare personal information, like your birth date, address, Social Insurance Number (SIN), or family members’ names. This is especially true with social media, where many eyes can see what you put out there on the internet.
When shopping online, be prudent about where you enter your credit card information. Only enter your credit card number on secure websites, which typically begin with ‘https’ instead of just ‘http’. The ‘https’ provides an additional level of security.
Begin Credit Monitoring
Credit monitoring is similar to a fraud alert. Credit monitoring notifies you if there are any changes to your credit reports. This will remind you to check your credit accounts for any changes and help you catch fraudulent activity early.
Some changes you might be alerted of include:
- Hard credit inquiries
- New credit accounts in your name
- Changed name or address
- Public records, like bankruptcies
- Changed balances and payments to your credit products
Credit monitoring isn’t a fool-proof preventative measure to identify theft. Before applying for credit monitoring, remember its limitations:
- Information isn’t guaranteed to be safe from data breaches
- No alert for someone withdrawing money from bank accounts
- It doesn’t warn you of potentially fraudulent tax activity
- It doesn’t freeze your credit
- It doesn’t stop phishing emails
Review Your Transactions
Go through your credit card bills each month to find any unfamiliar transactions. Additionally, make sure you call your creditor immediately if you don’t receive your bill. This is often a sign of fraud, since scammers may try to change contact information to hide their activities.
Bottom Line
While credit freezes are only available to Canadians living in Quebec, there are still several options available for you to protect yourself from identity theft. From fraud alerts to regularly monitoring your credit report, these actions can help protect your credit from identity theft.
