Secure Your Credit Reports

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Laws to Secure Your Credit Reports

According to Javelin Strategy & Research, One of the financial advisory firms in the U.S., more than $100 billion has been gathered in fraud using consumer’s identification between 2011 and 2016. By keeping the identity of others, the criminals open new credit accounts and use that account to purchase the products. Thus, The fraudulent activity has enabled the criminals to cheat U.S. consumers to this large extent. Right now, There are new federal laws that can help the Americans to safeguard their identity and prevent theft. The law which is termed as Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) has come into effect since September 2018. The key tools (that are also free) security freezes and fraud alerts are being enhanced for the benefit of U.S. Consumers.

Read the details on how the consumers can make the best use of the tools governed by the federal law for their benefit:

What’s a Security Freeze?

The new federal law defines Security Freeze as the restriction to disclose consumer specific reports which are subject to a security freeze to any person requesting the same. These restrictions are imposed on consumer or credit reporting agencies who handle such reports. In this way, The identity of the consumer is safeguarded and prevents identity criminals from opening credit accounts under different people’s names. Through the same Companies who are ready to offer credit in the consumer’s name who will not be able to check the credit file as it is subjected to security freeze and will deny any new requests for the offering of the credit.

Since September 2018, The EGRRCPA mandated the security freeze on consumer’s report and it is to be done free of cost. The security freeze, When demanded by the consumer charged by credit reporting agencies. The security freeze will continue until the consumer requests for its removal.

Security Freeze – Exemptions

A security freeze is mostly applicable in cases where the disclosing of the credit report is limited while extending credit to the consumer. So the law has some states where there will be some exemptions too. A credit report cannot restrict from getting shared in the below cases. –

  • If the consumer’s account is being reviewed or collected, Then the person or entity associated with this process can access the credit report
  • Any government company or court acting under an issued court order, warrant or a subpoena will need the credit report access. A private collection agency also can request for the same if acting under similar orders
  • Government agencies that are investigating fraudulent activities or working on unpaid or delinquent taxes based on court orders can request the credit reports
  • Credit reports can be asked by insurance companies if they are considering ensuring the consumer involved
  • All purposes, Apart from the issuing of credit, May warrant the need for a credit report to be made available. It could be for verifying or authenticating the consumer’s identity or for fraud related investigations


The Cons of a Security Freeze

Getting credit would eventually become a tougher and difficult process if there is a security freeze forced on your credit report. This risk is generally notified to all consumers who inquire the imposing of the freeze on their credit report. As an alternative, Free fraud alerts are another means of being aware and alert about the breaching of your identity or stealing of your information.

Fraud Alerts

Fraud alerts are a statement in the credit report of a consumer indicating that the consumer may be a victim of a fraud. That is to notify the receivers of the report that there had been a chance of identity theft and They can take additional steps to verify the identity of the consumer prior to increasing the credit. There are two types in these fraud alerts initial fraud alert and an extensive fraud alert. The latter type is free for seven years and can be availed if the consumer criticisms about identity theft with the credit report company.

Initial fraud alerts are ones that have been enhanced by the new federal laws. Prior to the revisions, The companies had to provide free initial fraud alerts for 90 days if a consumer is suspicious about his identity being compromised or stolen. Now, Under the new law, This period has been extended to one year. Active duty alerts are another type that is exclusively for members of the military and on active duty.

Utilizing the law

The EGRRCPA insists on having websites or means for the consumers to seek security freeze or fraud alerts with their credit reporting agencies. Alternative means for the consumers will be to reach the agencies through email and phone. Seek the guidance with professionals in this field such as Recovery Law Group, who can give the necessary inputs to utilize the federal government laws to your favor.