By Robyn A. Friedman
City & Shore Magazine
August in South Florida is sweltering. The average high temperature is 90 degrees, your air conditioner is running full time and you’re counting down the days until cooler weather arrives. So the word “freeze” should sound pretty good right about now. Especially when it comes with consumer protections.
A new federal law that kicks in on Sept. 21 will help you more easily protect your credit. The Economic Growth, Regulatory Relief and Consumer Protection Act includes provisions changing the way credit freezes and fraud alerts work.
Here’s what’s changing, according to the Federal Trade Commission:
Free credit freezes
- What it is: Available under current law, a credit freeze makes it difficult for someone to open a new account in your name. You need to notify each credit-reporting agency (Experian, TransUnion, Equifax) separately, and there’s a cost to both place the freeze and lift it.
- What’s new: Starting Sept. 21, it will be free to freeze and unfreeze your credit file. “A credit freeze is helpful when you suspect you may be a victim of identity theft or when someone has opened a credit line in your name without your knowledge,” says Bethy Hardeman, chief consumer advocate for finance site Credit Karma. “The new law makes credit freezes free of charge, which is great since identity theft can often be costly.”
Free child credit freezes.
- What it is: A child credit freeze allows you to freeze your child’s credit until he or she is old enough to use it.
- What’s new: Right now, not every state allows you to freeze your child’s credit. Starting Sept. 21, however, you’ll be able to get a free credit freeze for children under age 16 no matter where you live.
Year-long fraud alerts.
- What it is: A fraud alert warns creditors that you might be an identity-theft victim and that they need to verify that someone seeking credit in your name is really you. Under current law, a fraud alert lasts for 90 days.
- What’s new: Starting on Sept. 21, an initial fraud alert will last for one year. It will still be free. Identity-theft victims can get an extended fraud alert for seven years.
“The new law is good for consumers, establishing a national standard for all three credit bureaus and making it easier for consumers to understand their rights,” says Rod Griffin, Experian’s director of public education.
Active-duty military personnel get extra protection. The new law requires that, within a year, credit-reporting agencies must offer free electronic credit monitoring to all active-duty military.