Amendment to the FCRA

A new amendment to the Fair Credit Reporting Act (FCRA), The Economic Growth, Regulatory Relief, and Consumer Protection Act (S.2155), allows consumers to request a security freeze, free of charge, from the nationwide credit reporting agencies (Equifax, Experian, and TransUnion) and extends the length of time for initial fraud alerts from ninety (90) days to one year. The amendment also includes a new notice that must be provided to consumers when they receive a summary of rights under section 609 of the FCRA. As of September 21, 2018, employers must provide this new notice whenever the FCRA Summary of Rights is required to be provided to the consumer.

The additional security freeze rights are intended to serve as safeguards for consumers by making it harder for identity thieves to open accounts in a consumer’s name. To ensure that consumers are aware of these new rights, a new security freeze notice must be provided to the consumer whenever an employer or background screening company is required to provide a copy of the “A Summary of Your Rights Under the Fair Credit Reporting Act.”

The updated language of the new notice is as follows:

  CONSUMERS HAVE THE RIGHT TO OBTAIN A SECURITY FREEZE

You have a right to place a “security freeze” on your credit report, which will prohibit a consumer  reporting agency from releasing information in your credit report without your express authorization. The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. However, you should be aware that using a security freeze to take control over who gets access to the personal and financial information in your credit report may delay, interfere with, or prohibit the timely approval of any subsequent request or application you make regarding a new loan, credit, mortgage, or any other account involving the extension of credit.

As an alternative to a security freeze, you have the right to place an initial or extended fraud alert on your credit file at no cost. An initial fraud alert is a 1-year alert that is placed on a consumer’s credit file. Upon seeing a fraud alert display on a consumer’s credit file, a business is required to take steps to verify the consumer’s identity before extending new credit. If you are a victim of identity theft, you are entitled to an extended fraud alert, which is a fraud alert lasting 7 years.

A security freeze does not apply to a person or entity, or its affiliates, or collection agencies acting on behalf of the person or entity, with which you have an existing account that requests information in your credit report for the purposes of reviewing or collecting the account. Reviewing the account includes activities related to account maintenance, monitoring, credit line increases, and account upgrades and enhancements.

The Consumer Financial Protection Bureau released a revised Summary of Consumer Rights and a revised Summary of Consumer Identity Theft Rights in English and Spanish. A copy of the notice can be found at the bottom of this article published by the CFPB.

Disclaimer: This blog is for general informational purposes only and should not be construed as legal advice.