Approximately 1 in 2 Americans had their personal information compromised as a result of a 2017 data breach at Equifax, and as a result are now at an increased risk for identify theft and financial fraud. Identify theft is an increasing problem for all people. In response, Congress initiated a new credit freeze law protecting consumers. This law went into effect on September 21, 2018.
The new federal credit freeze law includes provisions that:
- Allow consumers to freeze their credit-report with each of the three major credit bureaus — Equifax, TransUnion, and Experian — without paying a fee. A freeze prevents lenders from pulling a person’s credit report, which is a key part of the approval process for a credit card or loan. Consumers were previously charged fees to both freeze and unfreeze their credit.
- Extend the length of consumer fraud alerts from 90 days to 1 year. Less severe than a freeze, fraud alerts warn lenders that your personal data may have been compromised and to take extra steps to verify your identity before approving new credit.
AAFCPAs Wealth Management advises clients to consider taking action to protect themselves.
A security freeze on your credit report generally prevents access to open new credit accounts. Security freezes must then be temporarily lifted or permanently removed each time you apply for new credit. Again, placing, lifting, and removing a security freeze is now free. You may also place a security freeze for a child under 16 or an incapacitated adult.
A fraud alert notifies you if someone attempts to open a line of credit with your social security number (SSN) and personal information. A fraud alert is a great first step to protect your personal information. Please note however, a fraud alert can make it harder for someone to open unauthorized accounts in your name, but not impossible. AAFCPAs Wealth Management advises clients to periodically review their credit to make sure an alert was not missed, and to renew your fraud alert request annually with the three major credit bureaus.
Placing a security freeze or fraud alert is relatively easy, although it does require you to sign up for separate ones at each of the three credit bureaus. For your convenience, we have provided links to the following:
- Equifax: equifax.com/personal/credit-report-services/
- Experian: experian.com/freeze
- TransUnion: transunion.com/credit-freeze
I was a victim of financial fraud.
Over the past year, a fraudster has repeatedly attempted to open a credit line using my SSN and personal information. Both my wife and I have taken proactive measures and placed security freezes on our credit reports.
We must now temporarily lift our security freezes when we want to access financing. For example, if I want to finance for free the new Apple iPhone. I would need to ask the vendor who issues their financing, and then call that bank and ask what bureau they use to run the credit check. I then need to contact that bureau to temporarily remove the freeze while my credit is being run.
This requires more premeditation, but well worth the effort because of the peace of mind that comes from this incredibly helpful line of defense in protecting our credit.
In addition to freezing your credit or adding alerts, AAFCPAs Wealth Management advises clients to take advantage of the federal law that allows you to pull your credit report every year for free. We advise all clients and their adult children to visit www.annualcreditreport.com and request and review a copy of your credit report on an annual basis.
AAFCPAs Wealth Management is available to guide clients through this process or answer any questions. Please contact: Andrew E. Hammond, CFP® at 774.512.4143, firstname.lastname@example.org, or your AAFCPAs Wealth Advisor.
AAFCPAs Wealth Management’s mission is to provide valuable peace of mind to those who share the awesome responsibility to manage wealth.