Starting in September, service members will be able to request free credit monitoring services from the nationwide credit reporting agencies, under certain circumstances.
These free credit monitoring services, often costing $30 or more a month, can help troops keep on top of their finances, by warning them about new activity on their credit reports. With early detection, troops can then take steps to nip fraud and other problems in the bud.
However, there’s a catch, under final rules of the Federal Trade Commission, to be published soon in the Federal Register. Because of the way the law is written, most of those who will be eligible for the free credit monitoring are those “assigned to service away from the usual duty station of the consumer.” That applies to active duty members and reservists on active duty under Title 10 orders.
But National Guard members don’t have to be deployed from their “usual duty station” in order to be eligible for the free credit monitoring, according to the FTC clarification. That’s because Congress added National Guard members to the group of those entitled to get free credit monitoring, but didn’t apply the requirement that a Guard member be away from his or her usual duty station. The FTC notes the apparent inequity.
“To the extent that Congress intended to provide free credit monitoring more broadly, the [FTC] calls on Congress to address this issue through additional legislation,” stated an FTC press release announcing the upcoming rule. The 2018 Economic Growth, Regulatory Relief, and Consumer Protection Act gave the new benefit to service members.
Defense officials earlier recommended that the FTC broaden the definition to be consistent with the definition of active duty in the military compensation law, which doesn’t require a service member to be deployed away from the usual duty station, according to the FTC final rule.
There’s also an issue of credit reporting agencies’ ability to determine who is qualified for the free service – especially when it comes to verifying deployments. So the FTC is encouraging the credit reporting agencies to “err on the side of providing the free service more broadly.” To reduce the likelihood that an eligible military consumer is excluded, the FTC will consider a credit reporting agency to be in compliance with the law if it provides free electronic credit monitoring services to consumers who self-certify active duty status; consumers who self-certify they are a reservist on active duty under Title 10 orders; and those who self-certify they are member of the National Guard. It will be up to the credit reporting agencies as to whether they will give this benefit to more service members.
The FTC’s final rule includes a provision that the credit reporting agency’s verification of active duty military status is valid for two years. After that, the credit reporting agency may require the consumer to provide additional proof.
There’s nothing in the FTC rule that requires a military consumer to notify the credit reporting agency when he or she returns to the duty station, according to FTC spokeswoman Juliana Gruenwald.
The nationwide credit reporting bureaus – Equifax, Experian and TransUnion – are still working out the details of how service members can sign up for the free credit monitoring, according to the FTC.
These services alert consumers about material additions or changes to their credit files, such as new accounts opened in your name; changes to address, name or phone number; changes to credit limits; changes to credit limits; and inquiries or requests for a consumer report, other than for pre-screening or account review.
These credit files include information about where you live, whether you pay your bills on time and the amount of debt; whether you’ve been sued or arrested; or filed for bankruptcy. The information is used to make decisions on whether to lend you money, whether to rent you an apartment, and, importantly for many in the military, it’s used in security clearance determinations. And under new guidelines, officials are conducting continuous monitoring of financial records of those who have roles in national security, including service members.
By using these proactive monitoring services, consumers can learn early on about potential fraud or problems, and deal with them early.
The FTC final rule extends the amount of time the credit reporting agencies have to notify a service member of changes to their credit file, from 24 hours to 48 hours, and to notify the consumer by mobile app, email or text message. The notice can also link to a website where the consumer can find more specifics.
Military consumers won’t have to pay to get access to their credit files if they receive notice that there’s an important change. If the credit reporting agency notifies a consumer about such a change to the credit file, it must also provide the consumer with free access to the file, according to the final rule.
In the law requiring this new free access, Congress didn’t set a deadline for credit reporting agencies to start providing the free monitoring. But they gave the FTC one year after the law was enacted on May 24, 2018, to come up with the rules implementing it.
So the FTC set a deadline for three months after the new rules are published in the Federal Register. But recognizing that the credit reporting agencies may need extra time after the rules are set -- to create systems to accept proof of active duty service, and to make changes in their systems to generate alerts about the changes -- the FTC states that they will allow credit reporting agencies to offer their current commercial credit monitoring service for free to service members, for up to a year after the effective date of the rule.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book "A Battle Plan for Supporting Military Families." She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.