New law, new consumer rights

Food experts don’t recommend it for your ground chuck or pork shoulder, but starting September 21, 2018, there’s something consumers can safely freeze, unfreeze, and then freeze again.

It’s their credit file.

Thanks to a new federal law – the Economic Growth, Regulatory Relief, and Consumer Protection Act – consumers will be able to contact each of the three major credit reporting agencies and direct them to place a free freeze on the consumer’s credit file. By restricting access, a credit freeze makes it harder for identity thieves to open new accounts in consumers’ names.

But once consumers have a freeze in place, what happens if they want to lift it so they can finance a purchase? That’s where another feature of the law comes in.

Not only will it be free for consumers to freeze their credit, but they can lift that freeze for free, too. And the law requires the credit reporting agencies to do it in a hurry. If a consumer asks for a freeze online or by phone, the credit reporting agency has to put the freeze in place no later than the next business day. If the consumer wants to lift the freeze – for example, to finance a new phone or fridge – that has to happen within an hour.

What does that mean for your business? Once freezes are free, it’s likely that more people interested in buying something from your business on credit will have freezes in place. The law streamlines the process for lifting those freezes, but there will be an initial adjustment period as consumers get used to the system of freezing, unfreezing, and refreezing their credit file. Under the new law, the FTC and the credit reporting agencies must set up webpages to make it easier for consumers to take advantage of their new rights. Those links will be in operation when the law takes effect.

Follow the FTC Business Blog and Consumer Blog as we post more on this topic.