Legislation has been introduced in the Senate that would prohibit credit reporting agencies from charging consumers for freezing their credit.
The bill, known as the Freedom from Equifax Exploitation (FREE) Act, is being introduced by Senators Elizabeth Warren (D-MA) and Brian Schatz (D-HI) in response to the data breach that occurred at Equifax that left the Social Security numbers and other personal data of as many as 143 million people vulnerable.
Besides making credit freezes free, the bill would also do the following:
- Require credit reporting agencies to refund any charge for a credit freeze following the Equifax breach
- Create a federally mandated requirement for credit reporting agencies to offer consumers a credit freeze or credit freeze removal
- Prohibit credit reporting agencies from selling consumers’ personal data to marketing companies when their credit is frozen
- Allow consumers to request that a fraud alert be included in their credit file if they have suspicion that they were harmed by the unauthorized disclosure of their personal identifying information, and extend the alert period from 90 days to one year and can be renewed for an additional year
- Give consumers the ability to get two free credit reports each year instead of just one
“Credit reporting agencies like Equifax make billions of dollars collecting and selling personal data about consumers without their consent, and then make consumers pay if they want to stop the sharing of their own data,” said Senator Warren. “Our bill gives consumers more control over their own personal data and prohibits companies like Equifax from charging consumers for freezing and unfreezing access to their credit files. Passing this bill is a first step toward reforming the broken credit reporting industry.”
Warren also said that she is launching an investigation into the credit reporting companies, announcing today that she sent letters to Equifax, TransUnion and Experian. Her letter to Equifax criticized the company for its initial response, saying it took too long to announce the breach and in doing so didn’t provide enough clarity about what happened. She then demanded answers to numerous questions within two weeks seeking information such as how many and what types of records were accessed and what company databases were accessed.
She also sent letters to the Federal Trade Commission and Consumer Financial Protection Bureau (CFPB) wanting to know what obligations credit reporting agencies have in reporting breaches to these agencies and the number of complaints they have received about the breaches.
Lastly, Warren also sent a letter to the Government Accountability Office requesting a review of the Equifax breach, seeking information on the current regulatory structure governing credit reporting agencies and consumer rights with respect to dealing with credit reporting agencies.