military new rules for free credit monitoring

Service members will be allowed to ask the national credit reporting bureaus for free credit monitoring services starting in September, subject to specific conditions.

By alerting soldiers to changes to their credit reports, these free credit monitoring services, which frequently cost $30 or more a month, can help troops stay on top of their finances. Armed forces can then take action to stop fraud and other issues in their tracks with early detection.

New Guidelines For Free Credit Monitoring

There is a caveat, though, according to the final regulations of the Federal Trade Commission, which will be released in the Federal Register shortly. Since the law is written this way, the majority of people who will be qualified for the free credit monitoring are those who are “sent to service distant from the customary duty station of the consumer.” This covers both active-duty personnel and reserve personnel serving under Title 10 orders.

The FTC has clarified that, in order to be eligible for the free credit monitoring, National Guard personnel do not need to be deployed fro m their “usual duty station.” This is so that National Guard members are included in the list of those who are eligible for free credit monitoring, but Congress did not include the restriction that a Guard member must be away from his or her regular service location. The FTC observes the obvious unfairness.

The [FTC] calls on Congress to resolve this issue through additional legislation, to the extent that Congress intended to provide free credit monitoring more generally, according to a news statement from the FTC announcing the new regulation. Service members now have access to the new benefits thanks to the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018.

According to the FTC final rule, defense officials had previously suggested that the FTC extend the definition to be compatible with the definition of active duty under the military compensation statute, which does not require a service member to be deployed outside of their regular duty station.

The ability of credit reporting organizations to identify who qualifies for the free service is also a problem, particularly when it comes to validating deployments. In order to “err on the side of giving the free service more broadly,” the FTC is advising the credit reporting firms.

The FTC will consider a credit reporting agency to be in compliance with the law if it offers free electronic credit monitoring services to consumers who self-certify their active duty status, consumers who self-certify they are a reservist on active duty under Title 10 orders, and consumers who self-certify they are members of the National Guard.

This will lessen the likelihood that an eligible military consumer will be excluded. The decision to extend this benefit to more service personnel will be up to the credit reporting companies.

The FTC’s final regulation stipulates that a credit reporting agency’s confirmation of a person’s active duty status is valid for two years. The consumer may then be asked to furnish more documentation by the credit reporting agency.

According to FTC spokeswoman Juliana Gruenwald, there is no requirement in the FTC rule that a military consumer notifies the credit reporting bureau when he or she returns to the service station.

According to the FTC, the specifics of how service members can sign up for the free credit monitoring are still being worked out by the three major national credit reporting agencies, Equifax, Experian, and TransUnion.

Inquiries or requests for a consumer report, other than for pre-screening or account review, as well as new accounts opened in your name, changes to your address, name, or phone number, and changes to your credit limits, are all examples of material additions or changes to your credit files that these services alert consumers to.

These credit reports contain information about your address, whether you make on-time payments on your debts and how much you owe, as well as whether you’ve ever been sued, imprisoned, or filed for bankruptcy. Decisions on whether to lend you money, whether to rent you an apartment, and, crucially for many in the military, whether to grant you a security clearance are all made using the information.

Additionally, in accordance with current regulations, authorities are constantly checking the financial histories of anyone who play a part in national security, including service members.

Consumers who use these proactive monitoring services can identify potential fraud or issues early on and take immediate action.

If consumers in the military are informed that a significant change has occurred, they won’t be charged to see their credit reports. According to the final rule, if a consumer receives notification from a credit reporting agency about such a modification to the credit file, the agency must also grant the consumer unfettered access to the file.

If military customers are notified of a significant change, they won’t have to pay a fee to check their credit reports. The final rule stipulates that if a consumer is informed of such a modification to their credit file, the credit reporting agency must also grant them free access to their file.

The timeframe for the credit reporting agencies to begin offering the free monitoring was not specified by Congress in the bill authorizing this additional free access. However, they granted the FTC a year from the time the law was passed on May 24, 2018, to develop the regulations implementing it.

Final Note

Thus, the FTC established a deadline of three months following the publication of the new regulations in the Federal Register.

The FTC has stated that they will permit credit reporting agencies to continue providing their current commercial credit monitoring service for free to service members for up to a year following the effective date of the rule, recognizing that they may require additional time to develop systems to accept proof of active duty service and to make changes in their systems to generate alerts about the changes.

For details on how to get military verification done, visit here.

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