More pressure on credit bureaus to make freezes free
The fallout from the Equifax data breach is continuing, and it’s spreading beyond Equifax.
Consumer protection authorities from about three dozen states wrote to the other major credit bureaus, Experian and TransUnion, last week urging them to immediately stop charging fees to freeze credit reports, as nearly half of the American population scrambles to protect themselves after their competitor was hacked.
The letters, sent recently by the Illinois attorney general on behalf of those from the other states, described consumers as innocent bystanders — they don’t choose to do business with the credit bureaus, yet they are at the bureaus’ “mercy” for data security and accuracy of their credit reports.
“We have heard from our consumers that they are outraged that they should have to pay a company with which they do not choose to do business in order to protect themselves from identity theft as a result of a breach that was not their fault,” the letters said. “The crisis in confidence extends to the entire credit reporting industry.”
The personal information of an estimated 145 million Americans was exposed in the breach at Equifax, which was discovered in July, but not announced until last month. Equifax immediately offered victims free credit monitoring and identity theft protection, but it came under fire for not waiving fees for people who wanted to freeze their credit files. Freezing files can stop new credit accounts from being opened with stolen information because lenders are unable to check the borrower’s payment history.
Many states have laws allowing credit bureaus to charge fees to freeze a credit file, and to temporarily remove a freeze to allow for a credit check. Equifax retreated amid the outcry and waived the freeze fees through January.
Dozens of attorneys general told Equifax in a letter last month it should reimburse freeze fees that people paid to Experian and TransUnion. That hasn’t happened, and now authorities and lawmakers are focusing more attention at the broader industry.
The letters to Experian and TransUnion said the attorneys general anticipate that national legislation will be passed to ban credit freeze fees industrywide.
“We believe this legislation will be successful given the public outcry in the wake of recent massive breaches where Social Security Numbers and other extremely sensitive information have been compromised,” the letters said. “Unfortunately, consumers are scrambling now to protect themselves with credit freezes, and they need help now.”