A groundbreaking federal law went into effect on September 21st, 2018, giving people powerful tools to protect their credit and fight identity theft. Yet, even years later, many are unaware of these protections and how they can make life easier for consumers and businesses alike. If you haven’t heard about free credit freezes or year-long fraud alerts, it’s time to catch up and take control of your financial security.

What’s the Deal with Free Credit Freezes?

A credit freeze, or security freeze, locks your credit file so no one can access it without your permission. Why is this important? If someone steals your identity, they might try to open a new credit card or take out a loan in your name. A freeze stops them in their tracks because lenders can’t check your credit file.

Before this new law, freezing and unfreezing your credit often came with fees. But now, it’s completely free for everyone—and the process is faster, too!

How Does It Work?

• Contact the Credit Bureaus: You’ll need to reach out to all three major credit reporting agencies: Equifax, Experian, and TransUnion.
• Online or by phone: A freeze must be in place within one business day.
• Lifting the freeze: It must happen within one hour of your request.
• By mail: Both freezing and unfreezing take up to three business days.

Parents can also freeze their children’s credit for free. This is a great way to protect kids from identity theft before they even have credit.

Locks vs. Freezes: What’s the Difference?

Credit locks and freezes might sound similar, but they’re not the same. A credit lock is usually part of a paid subscription service and may have monthly fees. A freeze, on the other hand, is free and provides the same protection. With the new law, freezes are the clear winner for most people.

Why Are Credit Freezes So Important?

Identity theft is a growing problem, affecting millions of people every year. Thieves can use stolen personal information to open accounts, take out loans, or even commit crimes in your name. The result? Financial stress and years of effort to repair the damage.

A credit freeze acts as a protective shield for your credit file. It prevents identity thieves from opening new accounts in your name, even if they have your Social Security number or other personal details. Unlike credit monitoring services, which alert you after the damage is done, a freeze stops fraudulent activity before it happens. And it’s completely free and doesn’t impact your credit score.

Year-Long Fraud Alerts: A Game-Changer

Looking for a step-by-step guide to set up a fraud alert? We’ve got you covered! Check out our detailed article here to learn everything you need to know. Plus, visit our downloads section to grab a free printable blueprint that makes the process even easier.

A fraud alert tells businesses to verify your identity before opening a new account. This is especially helpful if you’ve been a victim of identity theft or if you’re worried about it happening. Previously, fraud alerts lasted only 90 days. With the new law, they now last for a full year, giving you extended peace of mind.

If you’ve already experienced identity theft, you can request an extended fraud alert, which lasts for seven years. Setting one up is easy: just contact one of the three credit bureaus, and they will notify the other two.

Active Duty Alerts for Military Members

Military families often face unique challenges with identity protection, especially during deployments and frequent moves. The new law includes special active duty alerts that help servicemembers stay protected:

• Active duty alerts last for one year and can be renewed during deployment.
• These alerts also remove servicemembers’ names from prescreened credit card offer lists for two years, reducing the risk of identity theft from unsolicited offers.

Military members can set up active duty alerts by contacting any of the three credit bureaus.

What Does This Mean for Your Business?

If your business offers financing, you’ll need to be prepared to help customers navigate these changes. For instance, a customer might forget about a credit freeze when trying to finance a big purchase like a car or a refrigerator. The good news is that the new law requires freezes to be lifted within an hour, minimizing delays for both the customer and your business.

Steps for Businesses to Prepare:

1. Educate Your Staff: Train employees to explain credit freezes, fraud alerts, and the unfreezing process to customers.
2. Be Patient: Some customers may be unfamiliar with these protections. Be ready to guide them through the steps.
3. Monitor Compliance: If a credit bureau isn’t following the rules, report it to the Bureau of Consumer Financial Protection at consumerfinance.gov/complaint.

HR’s Role in Protecting Employees

Identity theft can also affect your employees, leading to IRS complications, health insurance problems, or damaged credit. HR teams should be ready to assist employees and point them to helpful resources like the FTC’s identitytheft.gov, a one-stop site for recovering from identity theft.

Where to Start

Here’s how to contact the credit bureaus to place freezes or fraud alerts:

• Equifax: equifax.com/personal/credit-report-services | 800-685-1111
• Experian: experian.com/help | 888-397-3742
• TransUnion: transunion.com/credit-help | 888-909-8872

A Quick Look at the Benefits of the New Law

Here’s a graph showing how the new law improves credit protection for consumers:

With free credit freezes, extended fraud alerts, and special protections for servicemembers, this new law empowers you to take control of your financial security. Whether you’re a consumer looking for peace of mind or a business aiming to streamline customer experiences, understanding these changes is key to making smarter financial choices.