Sep 21, 2018 | Consumer Protection, Employment & Technology Archive
The FTC announced that beginning September 21, 2018, consumers concerned about identity theft or data breaches can freeze their credit and place one-year fraud alerts for free.
Under the new Economic Growth, Regulatory Relief, and Consumer Protection Act, consumers in some states – those who previously had to pay fees to freeze their credit – will no longer have to do so.
Credit Freeze
A credit freeze, also known as a security freeze, restricts access to a consumer’s credit file, making it harder for identity thieves to open new accounts in the consumer’s name. The new law also allows parents to freeze for free the credit of their children who are under 16, while guardians, conservators, and those with a valid power of attorney can get a free freeze for their dependents.
In addition, the new law extends the duration of a fraud alert on a consumer’s credit report from 90 days to one year. A fraud alert requires businesses that check a consumer’s credit to get the consumer’s approval before opening a new account.
As part of its work to implement the new law, the Federal Trade Commission has updated its IdentityTheft.gov website with credit bureau contact information, making it easier for consumers to take advantage of the new provisions outlined in the law.
To place a credit freeze on their accounts, consumers will need to contact all three nationwide credit bureaus: Equifax, Experian, and TransUnion. Whether consumers ask for a freeze online or by phone, the credit bureau must put the freeze in place within one business day. When consumers request to lift the freeze by phone or online, the credit bureaus must take that action within one hour. (If consumers make these requests by mail, the agency must place or lift the freeze within three business days.)
Fraud Alert
To place a fraud alert, consumers need only contact one of the three credit bureaus, which will notify the other two bureaus.
According to the FTC, credit freezes and fraud alerts are two important steps consumers can take to help prevent identity theft. Identity theft was the second biggest category of consumer complaints reported to the FTC in 2017 — making up nearly 14 percent of all the consumer complaints filed last year. Consumers who believe they have been the victim of identity theft can report it and receive a personalized recovery plan at IdentityTheft.gov.
For more information, see “New Credit Law FAQs” and “Extended Fraud Alerts and Credit Freezes”
Source: FTC.gov
May 18, 2018 | Consumer Protection, Employment & Technology Archive
Recently, a class action lawsuit was filed in United States District Court for the Western District of New York against the University of Rochester seeking to protect the retirement savings of more than 36,000 employees who are participants in the University of Rochester’s Retirement Program.
The University of Rochester, according to the class action complaint, has a fiduciary duty to ensure that the school’s federally-regulated retirement plan does not charge excessive fees. Allegedly, over the past six years, University of Rochester plan participants have paid approximately $72 million in “grossly excessive” recordkeeping, distribution, and mortality risk fees – fees which, allegedly, are “close to ten times what they should be.”
The complaint against the University of Rochester was brought by a Plaintiff who has been paying more than $500 in service fees a year to TIAA, when “a reasonable fee for administrative services is no more than $50 per year.” There is, according to the complaint, “absolutely no legitimate basis why Plaintiff should be paying TIAA more than $500 per year for its services.”
According to the class action complaint:
All retirement plans require administrative services. The University [of Rochester] contracted with TIAA to provide administrative services for its Plan. TIAA pockets the bulk of the excessive fees. The reason why TIAA has been able to extract such grossly excessive fees is because TIAA’s fees are tethered not to any actual services it provides to the Plan, but rather, to a percentage of assets in the Plan. As the assets in the Plan increase, so too increase the fees that TIAA pockets from the Plan and its participants. One commentator likened this fee arrangement to hiring a plumber to fix a leaky gasket, but paying the plumber not on actual work provided but based on the amount of water that flows through the pipe. (Emphasis added)
The class action complaint states that the action against the University of Rochester
. . . is similar (but narrower in scope) to 18 separate lawsuits pending in federal district courts around the country.[] In each of [the] other lawsuits . . . plaintiffs allege a university defendant breached ERISA fiduciary duties by allowing TIAA to collect excessive fees from the university’s retirement plan. It appears TIAA exploited its rich heritage of being a non-profit low-cost financial service provider and duped universities into excessive fee arrangements. But now university plan participants are fighting back and demanding TIAA reduce its fees. It appears TIAA is willing to meaningfully reduce its fees if universities will just ask. By way of example, shortly after the University of Chicago was sued, it announced to its plan participants that it renegotiated TIAA’s fees, and successfully reduced fees on an annual basis by several million dollars. (Emphasis added)
Further, rather than “leveraging the Plan’s tremendous bargaining power to benefit Plan participants,” the University of Rochester, allegedly, “failed to adequately take proper measures to understand the real cost to Plan participants for TIAA’s services, to properly inform participants of the fees they were paying to TIAA as required by law, and most importantly, to act prudently with such information. As a result, Plan participants pay excessive fees for TIAA’s services.” (Emphasis added)
401(k), 403(b), Employee Stock Ownership & Other Retirement Plan Participants
If you believe your retirement plan investments have suffered losses due to imprudent investments, breaches of fiduciary duty, misrepresentations, excessive, unreasonable or undisclosed retirement plan fees or other corporate wrongdoing by retirement plan administrators and managers, please contact Kehoe Law Firm, P.C. by completing the form above on the right or sending an e-mail to [email protected].
Dec 14, 2017 | Consumer Protection, Employment & Technology Archive
FTC Consumer Information to Help Individuals After the Equifax Data Breach Decide Whether to Place a Fraud Alert, Credit Freeze or Credit Lock
In light of the Equifax data breach, the FTC provided FAQ guidance to help individuals decide whether to place a fraud alert, credit freeze or credit lock on their credit files to help stop or prevent identity theft.
Fraud Alerts
What is a fraud alert?
A fraud alert requires companies to verify your identity before extending new credit, which usually means calling you to determine if you are really trying to open a new account.
The three national credit reporting companies (Equifax, Experian, TransUnion) keep records of one’s credit history. If someone has misused your personal or financial information, call one of the credit reporting companies (TransUnion 1-800-680-7289; Experian 1-888-397-3742; Equifax 1-800-525-6285) to request an initial fraud alert on your credit report.
If you are concerned about identity theft, but have not yet become a victim, you can also place an initial fraud alert. For example, according to the FTC, you may want to place a fraud alert if your wallet, Social Security card, or other personal, financial or account information are lost or stolen. Additionally, you also may want to place a fraud alert if your personal information was exposed in a data breach.
A fraud alert is free, and the company you call must tell the other companies about your alert.
An initial fraud alert can make it harder for an identity thief to open more accounts in your name. When you have an alert on your report, a business must verify your identity before it issues credit, so it may try to contact you.
How long does a fraud alert last?
An initial fraud alert stays on your report for at least 90 days; allows you to order one free copy of your credit report from each of the three credit reporting companies; and after 90 days, you can renew your alert for additional 90-day periods.
Military service members who deploy can place an active duty alert on their credit reports to help minimize the risk of identity theft. An active duty alert on a credit report means businesses have to take extra steps before granting credit in your name. Active duty alerts last for one year and can be renewed to match the period of deployment. Military service members who deploy can get an active duty alert that lasts one year, renewable for the period of deployment. Identity theft victims (whose information has been misused, not just exposed in a breach) are entitled to an extended fraud alert, which lasts seven years.
If you have created an Identity Theft Report, you can get an extended fraud alert on your credit file. When you place an extended alert, you can get two free credit reports within 12 months from each of the three nationwide credit reporting companies, and the credit reporting companies must take your name off marketing lists for prescreened credit offers for 5 years, unless you ask them to put your name back on the list. The extended alert lasts 7 years.
How much does a fraud alert cost?
Again, fraud alerts are free, and with a fraud alert, you keep access to your credit and federal law protects you. Further, initial fraud alert lasts only 90 days, unless renewed.
Credit Freezes
What is a credit freeze?
A credit freeze limits access to your credit file so no one, not even you, can open new accounts until the credit freeze is lifted.
How does a credit freeze work?
To be fully protected, you must place a credit freeze with each of the three credit reporting agencies. Credit freezes can be placed by telephone or online. You will get a PIN to use each time you freeze or unfreeze, which may take one to three business days.
How long does a credit freeze last?
A credit freeze lasts until you temporarily lift or permanently remove it (except in a few states where credit freezes expire after seven years).
How much does a credit freeze cost?
Fees are set by state law, but, generally, cost $5 to $10 each time you freeze or unfreeze your account with each credit reporting agency. You can get a free credit freeze, if you are an identity theft victim, or, in some states, if you are over age 62.
While Equifax will let you place or lift a credit freeze for free until January 31, 2018, TransUnion and Experian are not offering free credit freezes. And, as of now, Equifax’s offer will end on January 31, 2018. This means that any time you need to get new credit, you will need to remove the credit freeze, then place it again, with each of the three agencies — at a cost of $5 to $10 per agency each time, depending on your state’s law.
Are credit freezes free for identity theft victims, and will I also get free credit freezes from the other two credit reporting agencies? The answer is: No. An identity theft victim is someone whose information has been exposed AND misused. If you are a data breach victim, your information is at greater risk of misuse; unless that happens, you are not an identity theft victim entitled to free credit freezes on that basis.
Many people have had very sensitive personal information exposed in the Equifax data breach, such as Social Security numbers and driver’s license numbers. Equifax is offering free credit freezes until January 31, 2018, and Equifax also will refund fees to anyone who already has paid for credit freezes since the breach was announced on September 7, 2017. If you want a free credit freeze from Equifax, the company can be reached via 1- 800-349-9960 or by visiting freeze.equifax.com.
Should I place a credit freeze?
A credit freeze means that no one (not even you) can access your credit file until you unfreeze it, using a PIN or passphrase, which makes it harder for identity thieves to open new accounts in your name.
To be effective, you must place a credit freeze with all three credit reporting agencies (Equifax, TransUnion, and Experian), because when a criminal attempts to take out new credit, a business can pull your credit report from any of the three agencies. If you have only frozen your Equifax file and the business checks with Experian or TransUnion, your Equifax freeze does not help you.
Credit freezes are generally best for people who do not plan to take out new credit. This, often, includes older adults, people under guardianship, and children. Individuals who want to avoid monthly fees also may prefer credit freezes over credit locks.
Credit Locks
What is a credit lock?
Like a credit freeze, a credit lock limits access to your credit file so no one, not even you, can open new accounts until you unlock your credit file.
How does a credit lock work?
Like a credit freeze, to be fully protected, you must place credit locks with all three credit reporting agencies. With credit locks, however, there is no PIN and, usually, no wait to lock or unlock your credit file (although the current Equifax credit lock can take 24 to 48 hours). You can lock and unlock on a computer or mobile device through an “app” – but not with a telephone call.
How long does a credit lock last?
Credit locks last only as long as you have an ongoing credit lock agreement with each of the credit reporting agencies. In some cases, that means paying monthly fees to maintain your credit lock service.
How much does a credit lock cost?
Credit reporting agencies can set and change credit lock fees at any time. As of today, Equifax offers free credit locks as part of its free post-breach credit monitoring. Experian and TransUnion may charge monthly fees (often about $20).
Do I need a credit lock?
Depending on your particular credit lock agreement, your fees and protections may change over time. So, if you sign up for a credit lock, it is difficult to be sure what your legal protections will be if something later goes wrong. Also, monthly credit lock fees can quickly exceed the cost of credit freezes, especially if the credit lock fees increase over time.
Differences Between Fraud Alerts, Credit Freezes & Credit Locks
Additional FTC Information & Resources
Credit Freeze FAQs
Extended Fraud Alerts and Credit Freezes
Fraud Alert or Credit Freeze – Which is Right for You
Free Freezes from Equifax
FTC’s Resource Page about the Equifax Data Breach
IdentityTheft.gov
FTC’s Equifax Data Breach Resource Page
Source: FTC.gov and related websites.
