New Federal Law Protects Seniors from ID Theft and Fraud

consumer protection

Rhode Island Attorney General Peter Kilmartin

On May 24, 2018, President Donald Trump’s signature enacted the Economic Growth, Regulatory Relief, and Consumer Protection Act, that as of September 21, 2018, allows consumers who are concerned about identity theft or data breaches to freeze their credit and place one-year fraud alerts for free.  The new law also allowed consumers in some states – those who previously had to pay fees to freeze their credit – will no longer have to do so.

According to the U.S. Federal Trade Commission (FTC) Identity theft was the second biggest category of consumer complaints reported to the federal agency in 2017 — making up nearly 14 percent of all the consumer complaints filed last year.

Restricting Scammers from Consumer’s Credit File

 A credit freeze, also known as a security freeze, restricts access to a consumer’s credit file, making it harder for identity thieves to open new accounts in the consumer’s name. The new law also permits parents to freeze for free the credit of their children who are under 16, while guardians, conservators, and those with a valid power of attorney can get a free freeze for their dependents, too.

In addition, the new law extends the duration of a fraud alert on a consumer’s credit report from 90 days to one year. A fraud alert requires businesses that check a consumer’s credit to get the consumer’s approval before opening a new account.

One of the biggest fears of loved ones of elderly relatives is the prospect of that relative being a victim of financial exploitation, identity theft or fraud.  Attorney General Peter F. Kilmartin is making sure Rhode Islanders are aware of this new federal law that lets some financial caregivers request a security freeze on behalf of a loved one.

“Many instances of financial exploitation include a person opening up credit cards or using the credit file of another for personal gain and identity theft.  This added layer of protection will allow a guardian or financial caregiver the ability better safeguard the older person from being taken advantage of by a stranger or even someone they know and thought they could trust,” said the Rhode Island Attorney General.

As part of its work to implement the new law, the Federal Trade Commission (FTC) has updated its IdentityTheft.gov website with credit bureau contact information, making it easier for consumers to take advantage of the new provisions outlined in the law.

According to the FTC, a consumer wanting to place a credit freeze on their accounts will need to contact all three nationwide credit bureaus — Equifax, Experian, and TransUnion. Whether they consumers ask for a freeze online or by phone, the credit bureau must put the freeze in place within one business day. When consumers request to lift the freeze by phone or online, the credit bureaus must take that action within one hour. But, if consumers make these requests by mail, the agency must place or lift the freeze within three business days.

Kilmartin says that when you are acting on behalf of a “protected consumer,” defined as an incapacitated person, someone with an appointed guardian or conservator, or a child under the age of 16,” you must give the credit reporting agencies proof of authority before you can freeze and unfreeze the person’s consumer’s credit. Proof of authority includes a court order (such as an order naming you guardian or conservator, a valid power of attorney.  Finally, you must provide proof of your identity, specifically your Social Security card, your birth certificate, or your driver’s license or other government issued identification.

Enhancing Rhode Island’s Consumer Protection Law

The new federal law enhances Rhode Island’s existing law that prohibits consumer reporting agencies from charging consumers a fee for a credit freeze, says Kilmartin.

Filed at Kilmartin’s request, and enacted earlier this year, the Rhode Island statute eliminates a provision of existing law that allows reporting agencies to charge up to $10 to consumers who ask for a credit freeze, also known as a security freeze.

The legislation, which the legislative sponsors introduced on behalf of Kilmartin, stems from the Equifax security breach last year during which the credit info of 143 million Americans was exposed. Initially, Equifax was charging consumers who asked for a credit freeze to protect themselves from its own security breach, although it stopped after public outcry and pressure from numerous attorneys general.

At the time the law was enacted, Kilmartin said, “This is a big victory for Rhode Island consumers, giving them greater control over who can access their personal and financial information. Credit bureaus make money from selling our personal information to third parties. They should not be able to profit off consumers who decide to take control over who has access to their personal data.”

If you believe you or an older relative has been a victim of financial exploitation, please contact your local police department, the Rhode Island Division of Elderly Affairs, or the Elder Abuse Unit at the Rhode Island Office of the Attorney General.

If you would like an investigator at the Elder Abuse Unit or an investigator with the Consumer Protection Unit to speak with your organization on the signs of elder abuse or how to protect from being a victim of a scam, please contact Mickaela Driscoll, Elder Abuse Investigator, at mdriscoll@riag.ri.gov or Martha Crippen, Director of the Consumer Protection Unit, at mcrippen@riag.ri.gov or by calling 401-274-4400.

Consumers who believe they have been the victim of identity theft can report it and receive a personalized recovery plan at IdentityTheft.gov.

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