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FCRA Amendment Effective Date Quickly Approaching

Effective September 21, 2018:  According to the Economic Growth, Regulatory Relief and Consumer Protection Act (“Act”), passed by Congress in May, language must be added to the Fair Credit Reporting Act (“FCRA”) Summary of Rights form explaining a consumer’s right to a security freeze.  Specifically, the Act amends Section 605A of the FCRA, stating that “[a]t any time a consumer is required to receive a summary of rights required under section 609,” the following notice must be provided:

“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 (“CFPB”) should be issuing a new FCRA Summary of Rights; however, they are not expected to do so before the September 21st deadline.  It is imperative for any entity required to provide the ‘Summary of Your Rights Under the Fair Credit Reporting Act’ to a consumer to update the form prior to the September 21st effective date to ensure compliance with this new nationwide requirement.

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