FTC Seeks Comment on Military Consumers Credit Monitoring Rule

The FTC is seeking comments on a proposed rule that would implement recent amendments to the Fair Credit Reporting Act (FCRA) made by the Economic Growth, Regulatory Relief, and Consumer Protection Act. The FTC proposes to: (1) require nationwide credit reporting agencies (CRAs) to provide a free electronic credit monitoring service to active duty military consumers; (2) define new terms related to this requirement; and (3) specify what constitutes appropriate proof of active military duty status.

The FTC seeks comments on the proposed rule provisions, as well as the following topics, among others, regarding the proposed rule:

• Whether it is necessary to have the restrictions on the secondary uses and disclosures of information collected from an active duty military consumer in this context;
• The adequacy of the verification methods used to prove active duty military status;
• The adequacy of various proposed definitions;
• Whether it is necessary to ban marketing until after an active duty military consumer who has expressed interest in the free credit monitoring service has been enrolled in that service, or whether this ban would be an undue burden on the CRAs;
• Whether 24 hours from any material additions or modifications to a consumer’s file for providing requisite notice is an appropriate timing requirement.

The proposed rule would require nationwide CRAs to provide a free electronic credit monitoring service to active duty military consumers that, at a minimum, notifies them within 24 hours of any material additions or modifications to their files.

The rule proposes to define key terms including, among others, “active duty military consumer,” “appropriate proof of identity,” and “nationwide consumer reporting agency,” with many such terms defined via cross-reference to existing legal definitions in FCRA and its implementing Regulation V. Regarding “material additions or modifications,” such term would be defined to mean significant changes to a consumer’s file, including things that may indicate potential identify theft or other fraud such as, among others, new accounts opened in the consumer’s name, inquiries or requests for a consumer report, and changes to a consumer’s name, address, or phone number; however, the term would not include certain inquiries for prescreened lists.

The proposed rule would allow active duty military status to be verified through: (1) a copy of the consumer’s active duty military orders; (2) a copy of a certification of active duty status issued by the Department of Defense; (3) a method or service approved by the Department of Defense; or (4) a certification of active duty status approved by the nationwide CRA.  The nationwide CRAs would be permitted to condition provision of the free electronic credit monitoring service on certain things, namely, the consumer providing appropriate proof of identity, contact information, and appropriate proof of active duty.  However, limitations would be included for communications about and in connection with the service.

The deadline for submitting comments is January 7, 2019.

The FTC’s related press release may be found here.