What You Should Know About Credit Freeze To Protect Against Financial Exploitation
This article was written by Stacy Canan and Lois Greisman for the Consumer Financial Protection Bureau.
If you manage someone else’s money, protecting your loved one from financial exploitation and scams is among your important responsibilities. Starting Sept. 21, 2018, a new federal law lets some financial caregivers request a security freeze, also called a credit freeze, on their loved one’s behalf. Taking this step can help protect them from identity theft and fraud.
Anyone can be a victim of identity theft
Identity theft happens when someone steals personal information, such as a Social Security number. That lets hackers, thieves, and even people you know open new credit cards and other financial accounts in your name. A security or credit freeze restricts access to your credit reports and makes it hard for identity thieves to open new accounts in your name. Under the new law, it’s free to freeze and unfreeze your credit file at —Equifax, Experian, and TransUnion. A credit freeze can help stop financial exploitation.
Help for financial caregivers
But what about people who can’t manage their finances on their own? The new law lets people with certain legal authority act on someone else’s behalf to freeze and unfreeze their credit file. The new law defines a “protected consumer” as an incapacitated person, someone with an appointed guardian or conservator, or a child under the age of 16.
If you’re acting on behalf of a protected consumer, you must give the credit reporting agencies proof of authority before you can freeze and unfreeze the protected consumer’s credit. Proof of authority includes:
- A court order (such as an order naming you guardian)
- A valid power of attorney
To obtain a credit freeze on the credit file of a child under 16, you must provide other proof of authority.
You’ll also need to provide proof of your identity, which can be your Social Security card, your birth certificate, or your driver’s license or other government issued identification.
More resources to help you manage someone else’s money
- If you’ve been named to manage money for an adult who needs help, the Managing Someone Else’s Money guides will walk you through four different fiduciary roles and provide tips on spotting financial exploitation and avoiding scams.
- If you believe a credit reporting agency is not placing a security freeze properly, you can submit a complaint to the Bureau of Consumer Financial Protection at consumerfinance.gov/complaint.
- If you think you or someone you know is a victim of identity theft, visit the Federal Trade Commission’s
Shannon Miller is one of the few Florida Board Certified Elder Law attorneys and has helped hundreds of clients serving as financial caregivers.
Other areas of expertise include Wills and Trusts, Guardianships, Probate, and Exploitation.