The Federal Trade Commission recently announced a pair of development; the first in connection with one of its latest rules and the other with the fourth installment of an ongoing study.
Starting Oct. 31, many members of the military now have access to free electronic credit monitoring.
In response to a new FTC Rule implementing a 2018 law, the regulator said the nationwide credit reporting agencies — Equifax, Experian and TransUnion — are providing free electronic credit monitoring services to active duty service members and National Guard members. Credit monitoring services can alert consumers to mistakes or problems with their credit reports that might stem from the unauthorized use of their personal information to obtain credit.
Back in June, the FTC finalized the rule that requires the nationwide consumer reporting agencies (CRAs) to provide free electronic credit monitoring services for active duty military consumers.
The Free Electronic Credit Monitoring for Active Duty Military Rule implemented legislation included in the 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act, which amended the Fair Credit Reporting Act (FCRA) by requiring CRAs to notify active duty military consumers about any “material” additions or modifications to their credit files.
The FTC received 19 comments on its proposed rule, released last November, which defined key terms such as “electronic credit monitoring service” and “material additions or modifications” to the file of a consumer. It also included proposed requirements for how CRAs can verify that an individual is an active duty military consumer, as well as restrictions on the use of personal information and on communications surrounding enrollment in the free service.
Officials explained the final rule defines “active duty military consumer” as a consumer in military service who meets the FCRA’s definition of “active duty military consumer,” which requires that the consumer be assigned to service away from their usual duty station, or be a member of the National Guard.
“While commenters recommended eliminating the requirement that a military consumer be assigned to service away from their usual duty station, the statute limits the commission’s discretion on this topic,” the FTC said.
“To the extent that Congress intended to provide free credit monitoring more broadly, the commission calls on Congress to address this issue through additional legislation,” the FTC added.
The regulator also mentioned the final rule clarifies that National Guard members do not need to be deployed away from their usual duty stations to be eligible for the free credit monitoring.
“Because the statute does not expressly apply the duty station requirement to National Guard members, the commission has interpreted the act as providing the benefit of free credit monitoring to members of the National Guard regardless of whether they are assigned away from their usual duty station,” officials said.
Furthermore, the FTC pointed out its final rule also addresses concerns that active duty military consumers might have to pay to access their credit files after being alerted to an addition or change.
Officials noted the final rule requires that when a CRA notifies an active duty military consumer about a material change to their credit file, the CRA must also provide that consumer with free access to that file.
The final rule extends the amount of time the CRAs have to notify an active duty military consumer of a material change from 24 hours to 48 hours. In addition, the final rule makes certain changes to the definition of “material additions or modifications,” according to the FTC.
Latest fraud study results
In other developments from the regulator, the FTC recently released the results of a comprehensive survey conducted in 2017 that examined the prevalence of mass-market consumer fraud, how it is perpetrated and what factors are associated with a greater likelihood that a consumer may fall victim to fraud.
The FTC conducted similar surveys in 2003, 2005 and 2011.
The survey results showed that 15.9% of the respondents were victims of fraud in 2017, which represents approximately 40 million U.S. adults.
Officials indicated the most common types of fraud reported by the survey respondents were fraudulent weight-loss products, fraudulent computer repairs and being falsely told that they owed money to the government.
The FTC said other commonly reported types of fraud included unauthorized billing for buying club memberships, unauthorized billing for an item for a cell phone and fraudulent prize promotions. The survey results indicate that each of these types of fraud had more than two million U.S. adult victims.
Internet transactions, which continue to grow, accounted for a substantial share of fraudulent incidents. According to the survey, 54% of all incidents of fraud involved Internet promotion of products and services, up from 33% in the 2011 survey.
The survey results determined that consumers ages 35 to 54 were more likely to be victims of fraud compared to consumers in other age categories. According to the survey, 22% of respondents between 35 and 44, and 20% of respondents between 45 and 54, were victims of fraud.
The survey also found that women were more likely to be fraud victims than men, with 19% of women reporting that they were victims of fraud, compared to 13% for men.
“The survey results indicate that people who were more willing to take risks, and those who had recently experienced a negative life event (such as a severe illness or the death of a loved one), were more likely to have been fraud victims,” the FTC said.
“Those experiencing high levels of debt and those who predicted that their incomes would rise substantially in the next few years were also more likely to have been fraud victims,” the regulator went on to say.