Consumer advocates have called on the Congress to make credit freezes free. This has happened after the incident where data was breached at Equifax.
The Senate is all set to pass a legislation to support free credit freeze, six months after the call. A larger bill that would ease the regulations on banks will be accommodating this section.
Why implement a credit freeze?
Credit freezes were a strategy recommended by experts to prevent identity theft after the data breach left the personal information of millions of citizens exposed. A credit freeze prevents identity thieves from using the personal information of a citizen to open another line of credit elsewhere. All credit access for the stolen identity is blocked. Of course, this does not mean that the data will remain protected in case there is another data breach.
The only hiccup in freezing credit is that earlier, credit freezes were processed only under a fee. In addition, if you wanted to unfreeze an account in order to open a new line of credit, there was an additional fee to be paid. Currently, the fee being charged is between $2 and $10 although several states have already begun processing credit freezes for free.
If the legislation passes the bill, then the entire process of placing and lifting credit freezes would be made free for everyone. The bill requires consumer rating agencies to fulfill credit freeze requests made online within a day, and those made by e-mail to be processed within three business days.
The bill needs to be run by the House before it can be passed. In the past, the House has rejected a bill that included a provision for free credit freezes.
The request to make credit freezes free was made by seventeen consumer groups that wrote to the Congress in October 2017.
Equifax, after facing retaliation for the massive data breach that had occurred, said that they would be willing to waive the fee that was being charged for the credit freeze.
Most major companies are in support of the bill as it is a way to simplify the entire process for consumers. Credit freezes are just one among the many ways consumers can protect themselves.
Companies like Equifax, Experian, and TransUnion offer a form of credit freeze called the lock. The lock products mimic a credit freeze and protect a consumer's data from identity theft by blocking the credit report.