A year after the devasting data breach at Equifax – one that left the sensitive personal information of over 143 million Americans exposed - consumers can now better protect themselves against identity theft.
Replacing a patchwork of state credit freeze laws, new legislation now requires the credit reporting agencies of Equifax, Experian and TransUnion to allow consumers an opportunity to “freeze” or otherwise “lock” their credit report from public disclosure without fee. Temporary “fraud alerts” can also be extended to one-year from the previous 90 days.
With the passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act – or EGRRCPA – in May, Congress amended the Fair Credit Reporting Act instituting several important changes. Effective Sept. 21, nationwide credit reporting agencies are statutorily mandated to provide a global credit freeze to consumers free of charge. Previously, 42 states – including Florida - allowed Equifax, Experian and TransUnion to charge consumers for locking their credit report. Unless a consumer was a verified identity theft victim, they were charged anywhere from $2-$10 - per credit bureau - each time they locked or unlocked their credit report.
A credit freeze – also referred by some as a security freeze or lock – was designed to make it more difficult for criminals to use stolen personal information to open new accounts fraudulently as credit reporting agencies were prohibited from providing credit information to potential lenders. Under the new legislation, initial fraud alerts are extended from 90 days to one year. No change has been implemented on the seven-year extended fraud alert.
Under the EGRRCPA, nationwide credit reporting agencies are now required to remove the fee for maintaining a credit freeze and must provide consumers a webpage for credit freeze and fraud alert requests.
Previously, freezing your credit report at the Equifax, Experian and TransUnion consumer reporting agencies was governed by state law. And with dozens of states allowing credit bureaus to charge a fee each time a report was locked or unlocked, consumers rarely took advantage of the opportunity unless they were specifically at risk for identity theft. The number of situations requiring a credit report were abundant. Whether applying for employment or insurance, a new cell phone or home utilities, a new credit card, vehicle or home mortgage loan, the cost could really become excessive.
“Freezing and unfreezing my credit report got to be an expensive proposition,” Fort Pierce businessman Tony DiFrancesco told the South Florida Reporter. “Each time I applied for credit, it was another $20 - $10 to thaw my report, then another $10 to freeze it again. The fees were ridiculous.”
With the new law now in effect, freezing and unfreezing a credit report has been made simple as each of the credit reporting agencies – Equifax, Experian, TransUnion - has an online portal dedicated to processing consumer requests. Now when a request to freeze a report has been received online or by telephone, it must be processed with one day. Likewise, a request to unfreeze a credit report must be completed with one hour.
Consumers are also protected under the provisions of the new Economic Growth, Regulatory Relief, and Consumer Protection Act with the ability to establish a credit freeze for their minor children.
According to a recent Javelin Research survey, more than one million children – or 1.48 percent of minors in the United States – were victims of identity theft in 2017, resulting in total losses of $2.6 billion and $540 million in out-of-pocket costs to families. Parents can now freeze their child’s social security number for credit purposes – a number typically issued shortly after birth – and reduce the potential for life altering identity theft issues.
“As a victim of identity theft, I look forward to being able to block my kids personal information from unlawful use,” Xavier Mitjavila Moix told the South Florida Reporter. “It’s all about piece of mind and the new legislation is a start in the right direction.”