Florida officials are pushing to eliminate a $10 fee to freeze a credit report after hacked credit reporting agency Equifax emerged as the most complained-about company in the state in 2017, in beefs to the federal Consumer Financial Protection Bureau.
This fall Equifax acknowledged a data breach that exposed the personal data of more than 145 million U.S. consumers, including Social Security numbers, birth dates, addresses and more.
In the wake of that episode, state officials including Chief Financial Officer Jimmy Patronis are pushing legislation to eliminate the $10 fee to freeze credit reports. Such freezes can make it more difficult for fraudsters to establish new credit in a victim’s name.
Indiana, South Carolina, Maine and North Carolina “do not charge this fee and we want to add Florida to that list this year,” Patronis said last week.
Florida law allows credit reporting agencies to charge a fee of up to $10 to freeze credit reports, he noted, “and data breach victims are required to submit paperwork to prove their identity is in jeopardy to avoid paying the fee. No one should have to jump through hoops to get a fee waived.”
Bills including SB 1302 and HB 953 aim to make it so.
Equifax did not respond to a request for comment, but the head of an industry trade group raised concerns.
“We in general oppose the removal of all fees from credit freezes,” said Francis Creighton, president and CEO of the Consumer Data Industry Association, which represents credit reporting agencies. “This is a process that costs the credit reporting agencies money. They have to have call centers and staff to do that.”
A security freeze placed on your credit file will block most lenders from seeing your credit history, as Consumer Reports has described it. That does not eliminate all fraud but makes it harder for a bad guy to get credit in your name, making a freeze “the single most effective way to protect against fraud,” the publication figured.
But it has drawbacks. Unless you are prepared to do a lot of unfreezing and refreezing on the fly, it also shuts out companies you may want to see your report to get a used car or a new smartphone, buy insurance or get approved as tenant.
Another option is a fraud alert, a notice placed on your credit report warning prospective lenders that you are a victim of or concerned about identity theft. That means they should take “reasonable extra steps to verify your identity,” according to Consumer Reports.
The terminology can get confusing, as there are also a variety of “credit monitoring” services companies offer, sometimes with monthly fees.
In any case, credit reporting and repair companies represented the top category of CFPB complaints from Florida, according to lendedu.com, which calls itself a marketplace for finance products including student loans, personal loans and credit cards. The next biggest categories were debt collection and mortgages.
Creighton said complaint numbers should be kept in perspective, because sometimes consumers are unhappy with other parties involved in the process, not necessarily or exclusively credit reporting agencies like Equifax, Experian and TransUnion. These can include lenders who deny credit or charge more. Or outside “credit repair” firms that may offer to improve credit scores by challenging adverse information in a consumer’s report, not always with lasting success if the smudges have a legitimate basis.
Meanwhile the CFPB itself, created by financial reform laws enacted during the administration of former President Barack Obama, faces an uncertain future under President Donald Trump.
The bureau oversees rules for banks and other financial companies. It has produced $12 billion for 29 million consumers in refunds and canceled debts.
Big companies have complained the agency goes too far, has too much independent power and hurts the economy. U.S. Rep. Jeb Hensarling, R-Texas, has called it “a rogue agency.” Trump has named his budget director Mick Mulvaney as its acting director. Uncertainty extends to the continued public availability of its complaint database.
“For quite possibly the last time ever (because of rumors of President Trump’s shutting it down), LendEDU has downloaded and analyzed every consumer complaint that was filed with the CFPB in 2017,” lendedu.com said.
Florida 2017 complaints to Consumer Financial Protection Bureau
Total Complaints: 21,905
Top Company: Equifax Inc. (2,716 complaints)
Credit Reporting/Repair Services: 8,701
Debt Collection: 4,819
Credit Card/Prepaid Card: 1,850
Bank Deposit or Checking/Savings Account: 1,790
Student Loans: 1,074