Beginning Sept. 21, consumers can land free credit freezes and longer fraud alerts under a new federal law aimed at protecting people’s credit. The law is called the Economic Growth, Regulatory Relief, and Consumer Protection Act according to the FTC.
When the law comes into effect, credit reporting agencies Equifax, Experian, and TransUnion will each be required to have an online space where consumers can request credit freezes and fraud alerts.
How the Free Credit Freezes Work
For consumers who are wary about having their credit and identity stolen, a credit freeze makes it more difficult for crooks to use a person’s identity to establish new accounts. When a consumer uses a credit freeze, they are typically given a personal identification number to use when they want to pursue new lines of credit.
Credit freezes aren’t a new thing, but right now, obtaining a credit freeze can cost consumers a fee, depending on the laws of the state. But when the new law takes effect this fall, freezing (and removing a freeze) from a consumer’s credit file will be free, no matter which state they reside in.
Children in every state will also be able to get free credit freezes. That protects their credit until they are old enough to open their own accounts. The new law applies to children who are 16 years old or younger. Currently, only some states allow credit freezes for children.
Why cover children? Well, over a million identity fraud victims in 2017 happened to be minors according to LendEDU.
What the Fraud Alerts Entail
Under the new law, consumers can also get year-long fraud alerts that will let them monitor their credit. Fraud alerts notify companies to check with consumers before a line of credit or account is opened for them.
Fraud alerts aren’t new, but as of right now they only last 90 days. Under the new law, the initial alerts will be year-long. Consumers who have had their identity stolen will still be able to get a seven-year fraud alert.
Additionally, active military personnel will be entitled to receive electronic credit monitoring at no cost, within a year of the law being in effect.
Ways Consumers Can Safeguard Their Credit and Identities
If consumers want to take additional measures to protect their credit information and identities, there are a number of ways for them to do so.
One way is to never give out personal information when receiving a phone call, even if the caller identification on a consumer’s phone leads them to believe they can trust the number. Consumers should be highly suspicious of any unexpected requests they receive for money or their sensitive personal information.
People who feel pressured in any way to respond right away to a request should end the telephone call without giving any information away. Any perceived threats should be reported to the authorities.
Consumers should carefully consider how they pay their bills and make their purchases. Credit cards have more fraud protection typically than some other forms of payment such as debit cards and wiring money. That means it’s always best to use credit cards to pay for items when possible.
Consumers should check their credit and bank accounts often – even daily – to watch for fraudulent purchases. They should also check their credit reports at least several times a year to spot any unauthorized lines of credit or loans.