TransUnion settlement offers free credit monitoring |
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The benefits
Consumers have a choice between six or nine months of free credit monitoring. Opting for nine months of credit monitoring prohibits you from signing up to receive a possible cash benefit. Here are the details of those options:
Six months of free, basic credit monitoring service, including unlimited access to your TransUnion credit report and score, plus the ability to place and lift a credit freeze on your TransUnion credit report at any time for no additional charge. If you select this option, you can still sign up to receive a cash payment if there is one, and you can still file an individual lawsuit against the two companies.
Nine months of free, enhanced credit monitoring service, which includes the ability to see your insurance scores and use a mortgage simulator service. The mortgage simulator shows consumers which mortgage rates they would qualify for based on a nationwide survey of rates from the Heitman Group. A "what if" feature demonstrates how hypothetical changes to a person's credit score and other factors could result in different rates.
As with basic credit monitoring, people will also get unlimited access to their TransUnion credit reports and scores, plus the ability to place and remove a credit freeze on their TransUnion credit files for free. Selecting this option prevents you from receiving a cash distribution or filing an individual lawsuit.
The chance to receive a cash distribution. This option still allows you to register for six months of free credit monitoring. You also keep the right to file an individual lawsuit, but only if you don't receive a cash payout.
The settlement would establish a $75 million settlement fund. Don't expect a windfall, though, if you register for a possible cash benefit. With as many as 190 million people eligible for a piece of the pie, there might only be crumbs left, after lawyers' fees, a donation of $150,000 to nonprofits, payment of damage claims and other expenditures eat into the dough.
As for the free credit monitoring options, not everyone is enthused. "I would never pay for credit monitoring, but I would take it for free," says Ed Mierzwinski, U.S. Public Interest Research Group consumer program director. "But I'd be very careful that TransUnion is going to try to upsell people for additional products or try to trick them into buying credit monitoring at the end of the term."
Normally, credit monitoring from TransUnion costs $11.95 each month after a 30-day free trial period.
Concerned that people appear to give up more legal rights by choosing the nine-month option, Mierzwinski adds that "the security freeze is your only real protection against identity theft."
A security freeze prevents the credit-reporting agencies from releasing your credit report or score to third parties that don't have a permissible purpose. Freezes essentially prevent credit checks, which helps prevent fraudsters from opening new lines of credit in a victim's name.
Consumers also have the option to place initial fraud alerts on their credit reports. Placing one costs nothing, lasts 90 days and asks the credit grantor to take additional steps to verify the applicant's identity. Unlike the credit freeze, however, it does not prevent the credit-reporting agencies from releasing your credit report and score to third parties.
Credit monitoring acts as a fraud detection tool rather than a fraud prevention tool. It alerts you to key changes in your credit file -- after they happen. Watch the video, "How to monitor your credit," to learn about key differences between credit monitoring, credit freezes and fraud alerts.
What you can do now
You don't have to wait for final approval of the settlement to check your TransUnion credit report. You're entitled to one free copy of your credit report from each of the three major credit-reporting agencies every 12 months. Go to www.annualcreditreport.com or call (877) 322-8228 to request your free copy. Stagger your credit reports by getting a different one every four months and you can "monitor" your credit for free.
Residents of Colorado, Maine, Maryland, Massachusetts, New Jersey and Vermont get an extra free credit report from each credit bureau, thanks to state law. Georgians have the right to two additional reports from each agency for free.
Keep in mind that the TransRisk score that comes with the free credit monitoring is not a FICO score, the most widely used score in the credit industry. To get the FICO score based on your TransUnion credit report, you can go to myFICO.com. Unlike your free annual credit reports, you must purchase your credit scores.
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