A recent amendment to the Fair Credit Reporting Act implements changes to the Initial Fraud Alert, extending its duration from 90 days to 1 year. Also, consumers now have the ability to freeze their credit at no cost. The changes were initiated by the new Economic Growth, Regulatory Relief, and Consumer Protection Act that went into effect September 21, 2018. Prior to the enactment of the bill, consumers in some states had to pay a fee to place or remove credit freezes.
In layman’s terms, a fraud alert requires businesses that check a consumer’s credit to get the consumer’s approval before opening a new account. The credit file will not be released to whomever requested it until the individual who initiated the fraud alert provides the personal identifying information to authorize its release.
A credit freeze restricts access to a consumer’s credit file, making it harder for identity thieves to open new accounts in the consumer’s name. If a consumer asks for a freeze online or by phone, the credit bureau must put the freeze in place within 1 business day. When a consumer requests to lift the freeze by phone or online, the credit bureaus must take that action within 1 hour or, if requested by mail, within 3 business days.
The new requirements are being reviewed by Hudson Cook, LLP, and integrated into the AFIP certification curriculum, the DealerAide Compliance Suite guidance and the Association of Dealership Compliance Officers (ADCO) resource material.
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This article is intended for informational and educational purposes only. It should not be considered legal advice. Readers are responsible for obtaining legal advice from their counsel.