Credit freezes help stop identity fraud — so why are they only offered in

When looking up his credit report earlier this year, Stéphane Hamel found out a car loan had been taken out in his name — from a bank he doesn’t even do business with. 

“I ended up… with a $25,000 loan that I never asked for,” he told CBC News.

The Quebecer, who moved to Alberta two years ago, was surprised to find out the loan referred to an address in Trois-Rivières, Que., which was unknown to him. He says the lender never bothered to verify.

Hamel might have avoided this exposure to fraud if he hadn’t relocated. Quebec is the only province where consumers can freeze their credit — an easy way to protect against identity fraud by blocking access to your credit report, so fraudsters can’t open credit card accounts or take out loans. 

Credit freezes are “very useful and effective” says anti-fraud consultant Vanessa Iafolla, especially in the wake of a growing number of data breaches, like the recent Ticketmaster incident which exposed customers’ credit card information. 

“When you have this much access to personal data, identifiable information, fraudsters can very easily get at the necessary information to secure credit products. So a credit freeze basically puts up a moat,” said Iafolla, from Anti-Fraud Intelligence Consulting, based in Halifax.

“And the reason why that is so deeply important when it comes to preventing fraud is that, by the time people usually figure out that their credit has been accessed, it’s too late.”

It was the Desjardins data breach — revealed in 2019 and affecting roughly 9.7 million people and businesses — that prompted Quebec to enact legislation last year forcing credit agencies such as Equifax and TransUnion to offer credit freezes to its residents, free of charge.

Elsewhere in Canada, even a paid subscription to credit monitoring services does not include security freezes. 

But this measure, if offered across the country, would effectively prevent a scenario where a bank would grant a loan to the wrong person, Hamel says.

“I would rather see my credit refused occasionally because I forgot to unlock it rather than seeing a $25,000 loan appearing on my report, impacting my credit score, and the stress and the time it takes to fix it,” he said.

Added cost for credit agencies

Equifax says credit freezes are only offered in Quebec because of its Credit Assessment Agents Act. 

“One exception to note is a scenario where an individual locks their Equifax credit report while they are a resident of Quebec and they subsequently move to a different province or territory,” spokesperson Heather Aggarwal said via email. 

“That individual would have the ability to unlock their Equifax…