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It's automatic. You ask for a loan, and the bank examines your credit history. If you object to such scrutiny, kiss the money goodbye.

That's the mechanism behind a new security option for consumer credit reports. Starting next summer, Louisianans will be able to lock up their credit reports under a new program aimed at slowing down identity theft.

For people who choose it, the new "security freeze" bans access to individual credit histories unless reporting agencies first receive a personal identification number. Even if imposters have vital data, such as a Social Security card or a driver's license, the unwitting banks or merchants they approach won't be able to access a potential victim's credit report without the PIN. That would kill the transaction--and the fraud along with it.

The security freeze program won't be free for most people. Though proven identity theft victims and senior citizens can sign up at no cost, other participants must pay $10. And every time the freeze is lifted for a credit check, it's another $8--or $24 if each of the nation's big three credit reporting agencies is asked for the lift.

With 162,000 identity theft complaints filed with the Federal Trade Commission in 2002 alone, proponents say a security freeze is, at least for now, the only sure-fire way to fight identity theft.

Freeze, anyone?

But some people think the measure could be overkill. Some retailers, for example, are worried it will simply add another layer of hassle for business owners and might affect sales, particularly because of a minimum three-day delay in lifting a freeze.

"If somebody didn't realize they'd done it, or the spouse does it without the other one knowing, they could walk into a dealership and the dealer would say, 'Sorry, we can't run your credit,'" says Bob Israel, head of the Louisiana Auto Dealers Association.

Perhaps the biggest question is whether anyone will use the security freeze. In California, which two years ago became the first state to enact security freezes, about 2,000 people have signed up. In Texas, the only other state where freezes are available, about 150 have enrolled.

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But Bridget Thomas, one of the biggest proponents of the measure in Louisiana, says it's no wonder why more people in those states aren't using the program. California credit agencies do virtually nothing to publicize it, she claims, and in Texas the option is available only to proven victims of identity theft, making it unavailable to most residents.

Thomas is convinced security freezes can be a powerful deterrent to identity theft. Her tale of being victimized was perhaps the biggest impetus behind Louisiana's security-freeze legislation.

The first hint of trouble for the Prairieville mother of two came in 2002, when a bill collector called about the unpaid balance on a satellite dish. Not only had she never bought a dish; she was living overseas when the purchase took place. She suspected more than a glitch and started checking.

Over the next several months, she unraveled every consumer's worst nightmare. An articulate woman by the same name and a former employee of Thomas' bank hijacked her Social Security number and driver's license to rack up $65,000 in loans and merchandise.

"No one wants to believe you. Creditors want you to prove that you were a victim," she laments.

Through her prodding, the Legislature approved several key reforms that eventually were rolled into federal legislation approved last year. Armed with Louisiana Attorney General Charles Foti's support, Thomas scored another victory at the State Capitol this year with the security freeze. Credit reports are some of the most valuable assets people have, she notes. "But it's one that we have very little or no control over."

"They said it's going to delay credit," Thomas recalls. "I said, 'You know what, let us decide how long we want to wait.' Since when does credit have to move at a nanosecond pace?"

Lukewarm reception

Steve Uffman, head of Consumer Credit Counseling of Baton Rouge, says the industry already has taken several steps to combat identity theft and its efforts started long before the debate over security freezes.

Consumer Credit is an affiliate of Atlanta-based Equifax. Equifax, Trans Union Chicago and Experian Information Solutions are the big three credit reporting agencies.

Though Consumer Credit initially opposed the legislation, Uffman eventually supported the measure after working with Foti's office on the specifics. Even so, Uffman says he's concerned.

"The key is not more regulations and restrictions but a higher level of education," says Uffman.

Despite the reservations, Uffman says he expects Louisiana's credit industry will support the new program. The industry plans to educate business owners before enrollment begins in July, and some of the first workshops are scheduled to start this month.

"The legislation, between both federal and state, are raising costs to all of the lending community," he says. "But at end of day, consumers are going to have easier access to information, better protection as far as identity theft, and they're going to have numerous opportunities to become more financially literate."

Thomas says that in her case, creditors overlooked rudimentary checks, starting with her driver's license. While her impostor was tall and black, Thomas is white and 5-foot-3. The thief was also much younger.

"The first thing that would have gone on in my head was, 'What is a 20-year-old woman doing with that kind of credit score?' But they did nothing."

CHRIS GAUTREAU is a Baton Rouge-based free-lance writer.