Hand holding lock and icons to represent new law on credit freezes and fraud alerts protecting consumers

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October is National Cybersecurity Awareness Month. This annual initiative, sponsored by the Department of Homeland Security, aims to heighten online safety and security for every American. Beginning September 21, 2018, a new Federal law makes it easier to safeguard yourself from personal identity theft and financial scams. Here’s what you need to know about the new law on credit freezes and fraud alerts.

The New Law On Credit Freezes

What’s a credit freeze?

A credit freeze, or security freeze, locks your credit by restricting access to your credit report. This makes it harder for identity thieves to open fraudulent accounts using your information. Without access to your credit report, most creditors won’t approve loans, credit cards, etc.

What does the new law on credit freezes offer?

The new law was enacted in response to the Equifax breach in 2017, which affected 147.9 million Americans [1]. Credit freezes are now free for everyone.

Is a credit freeze the same as a credit lock?

No. A credit lock is similar, but typically involves a fee.

How do you set up a credit freeze?

Contact each of the three credit bureaus (Equifax, Experian, and TransUnion) separately, by phone or online. A credit freeze takes one business day to take effect. You’ll be issued with a special PIN, which you’ll need to provide later if you choose to remove your credit freeze.

Does a credit freeze suspend my credit score too?

No. Creditors can still report paid-off loans, delinquent accounts, or other updates that may influence your credit score.

Can I still use my credit cards?

You can still use existing credit cards. However, you’ll need to remove the credit freeze if you wish to apply for a new card.

How long does a credit freeze last?

A credit freeze is indefinite.

How do you remove a credit freeze?

You can remove a credit freeze temporarily (e.g., to apply for a new credit card or for a new employer to conduct a background check), permanently, completely (from all three credit bureaus), or selectively (from only one or two agencies). You must contact each credit bureau individually and provide your PIN. Your credit freeze will be removed within one hour of notification by phone or online, or within three business days for mailed requests.

The New Law On Fraud Alerts

What’s a fraud alert?

A fraud alert still allows creditors to access your credit report. However, they must contact you to verify your identity before establishing a new account, loan, credit card, etc. There are different types of fraud alert, including special alerts for identity theft victims and active duty military. Fraud alerts are particularly useful if you’ve had your wallet lost or stolen, or if your personal information has been exposed as a result of a data breach.

NOTE: A fraud alert only helps prevent new fraud. You should remain vigilant in monitoring all existing accounts, credit card bills, and insurance policies for fraudulent transactions.

What does the new law on fraud alerts offer?

Previously, you had to renew a fraud alert every 90 days. Under the new law, fraud alerts will remain in place for a full year, or up to seven years if you’re already a victim of identity theft. You’ll still need to renew your fraud alert annually, however.

How do I set up a fraud alert?

You need only contact one of the three credit bureaus (Equifax, Experian, and TransUnion). They’ll share the information with the other two credit bureaus.

I already have a fraud alert in place. What should I do now?

Request a new fraud alert now, to ensure a full year of protection going forward.

Additional Information

The Federal Trade Commission suggests parents place a credit freeze on their child’s credit to help prevent identity theft until your child is older.

You can also set up a credit freeze for loved ones for whom you act as a guardian, conservator, or power of attorney. You’ll need proof of authority to act when contacting the credit bureaus.

Consider placing a security freeze and/or fraud alert with the National Consumer Telecom and Utilities Exchange. Identity thieves often open fake cell phone accounts to legitimize their counterfeit identity and to establish fake contact information.

SageVest Wealth Management cares about you and your wealth. We act as your trusted financial advisor. We actively monitor clients’ accounts and proudly serve as a fiduciary. If you’re interested in our customized financial planning and investment management services, please contact us for more information.