Free Credit Monitoring for Active Duty Military Members
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By Susan Grant, Director of Consumer Protection and Privacy, Consumer Federation of America

Under a law that Congress passed last year, members of the military who are on active duty have the right to ask credit reporting agencies for free electronic credit monitoring services. A popular feature of many fee-based identity theft services, credit monitoring alerts people when there are changes to their credit reports such as new accounts added – information that can help them detect certain types of identity theft quickly and take remedial action.

All Americans are entitled to request free copies of their credit reports once every 12 months. It’s simple to do by going to the website operated by “big three” credit reporting agencies, Equifax, Experian and TransUnion, or calling 1-877-322-8228. Since identity theft can strike at any time, it’s also a good idea to check your credit and other financial accounts regularly for signs of unusual or unauthorized activity. But for people on active military duty, it may not be so easy to get their credit reports or keep a close eye on their accounts. Free credit monitoring will be a big help to these military members.

Before it can start, however, the Federal Trade Commission (FTC) must write rules to define “electronic credit monitoring services,” “material additions or modifications” to credit reports, and other terms. The rules will also cover what information can be required for members of the military to prove their identities and active duty status and bar unfair practices such as misrepresenting that it’s necessary to buy a product or service in order to get the free credit monitoring.

The comments that CFA and other consumer groups made to the FTC about the proposed rules included these important points:

  1. When military members receive alerts from the credit monitoring services, they should have free online access to their credit reports. Not all events will trigger alerts – for instance, people won’t be notified every time their credit reports are updated to show they’ve paid a bill on time. So when something does result in an alert, people are going to want to check their credit reports to see if there is a problem – that’s the reason for offering the free credit monitoring in the first place. They should be able to do that without having to use their free annual reports or paying a fee.
  2. The definition of “material additions or modifications” that would trigger alerts should include a significant drop in the person’s credit score. This could be a sign of fraud; for example, it could be caused by an identity thief taking over an existing account and drastically increasing use of the credit limit.
  3. The proof of identity required to request the free credit monitoring should accommodate the special circumstances of active duty military personnel. Questions like what addresses have you lived at in the last two years may be too burdensome for members of the military who’ve had to move around frequently. It’s relatively easy for people to prove their identities when they purchase credit monitoring services; it should be just as easy for active duty military members who request free credit monitoring.
  4. The personal information that military members must provide to get free credit monitoring services shouldn’t be used for marketing or other unrelated purposes. Limits must be put in place to protect military members’ privacy and prevent inappropriate uses of their personal, confidential information.
  5. Advertising for other products and services shouldn’t be allowed during the process of enrolling in free credit monitoring. Military personnel should be able to sign up for the free credit monitoring without being distracted by come-ons for other things. And even after enrolling, they shouldn’t be solicited to buy identity theft insurance, which, as a government study found, have very little value.
  6. Military members shouldn’t be asked to agree to terms and conditions such as “forced arbitration” in order to get the free credit monitoring. Congress gave active duty military members the right to request free credit monitoring. It’s not appropriate to ask them to give up other rights in return, such as the right to take legal action if they’re treated improperly.

Americans in active duty military service have enough to worry about without having to wonder if they’re identity theft victims. While credit monitoring doesn’t detect all fraudulent uses of one’s personal information, it can alert people to some of the most common types of identity theft and give them a head start on resolving the problems that may result. We all should be able to check our credit reports, any time we want to, for free. This new law is a good first step.