Fair Credit Reporting Act News
Investigating the legal protections around credit information for dead people and the effects on identity theft prevention
Sunday, November 10, 2024 - Enacted in 1970, the Fair Credit Reporting Act (FCRA) provides consumers with notable rights about the way their credit records are gathered, shared, and applied. One sometimes underappreciated feature of the FCRA's reach, meanwhile, is how it affects dead people's credit records. Their credit records stay under the control of the FCRA even after a death, providing some security meant to stop identity theft and maintain the privacy of the estate. Understanding these measures is crucial for family members and estate executors handling posthumous financial matters and preventing possible information access abuse. Credit reporting companies including Equifax, Experian, and TransUnion follow FCRA rules on managing credit files of deceased consumers. The Social Security Administration (SSA) generates a Death Master File (DMF), which details the dead, upon a death. Credit reporting companies label credit accounts as belonging to a deceased person using this file. The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) mandate that records be updated to show the death of the individual in order to stop dishonest behavior that can compromise the estate or the family. By targeting the names of dead people, fraudsters can open false accounts more easily as their credit information is less regularly watched. One key line of protection against this kind of fraud is the FCRA's demand for accurate and current reporting. By notifying the credit bureaus directly of the death and supplying pertinent evidence like a death certificate, family members and executors can help to support this protection even further. This additional step guarantees a quick mark of the deceased's credit file, therefore lowering the possibility of identity theft.
The FCRA also gives family members and authorized representatives of the deceased special rights to inspect and control credit records. Executors or family members, for example, can ask for copies of the deceased's credit report to learn about any outstanding debt or open accounts they should pay off. Accessing these reports will help them to control the closing of the estate and identify any unusual behavior. In this regard, the FCRA's clauses enable families to manage debt, stop regular payments, and shut accounts with more openness, thereby guaranteeing they are informed of all financial responsibilities connected to the estate of the deceased.
Moreover, the FCRA requires that any party using a credit report of a deceased individual have a good reason and appropriate authority. This clause guarantees access to this sensitive material exclusively to those directly interested in handling the deceased's financial affairs--that of creditors, executors, or family members. Unauthorized persons could perhaps use the deceased's credit file without FCRA protections, therefore endangering the estate from financial loss and fraud.
Although the FCRA provides a basis for safeguarding the credit information of deceased consumers, experts advise family members and executors to be proactive in lowering any dangers. Families can ask for a credit freeze on the deceased's accounts in addition to informing the credit bureaus, therefore providing even another level of protection. Certain jurisdictions have legislation supporting this practice, allowing credit bureaus to record a "deceased alert" on the credit file, so making it more difficult for identity thieves to register accounts in the deceased name.
