State Senator Jerry Hill Introduces Legislation To Provide Free Credit Freezes For Californians

6 Legislators Co-Author Hill’s SB 823 To Eliminate Fees For Consumers Who Want To Protect Financial And Personal Data Held By Credit Reporting Agencies

January 4, 2018 - SACRAMENTO – State Senator Jerry Hill introduced consumer protection legislation yesterday to make it free for all Californians to place a security freeze on their financial and personal data with the nation’s credit reporting agencies.

The co-authors of Senate Bill 823 include Senators Cathleen Galgiani, D- Stockton, and Bob Wieckowski, D-Fremont, and Assemblymembers Kevin Kiley, R-Granite Bay, Monique Limón, D-Santa Barbara, Evan Low, D-Silicon Valley, and Mark Stone, D-Monterey Bay.

“Californians should not be forced to pay for protecting their credit from the alarming data breaches of personal information that have become all too common,” said Senator Hill, D-San Mateo and Santa Clara Counties. “Credit agencies are involved in so many aspects of our lives, from major purchases such as buying a home or car, to everyday transactions like signing a new cell phone contract. These agencies possess our most sensitive information, and they shouldn’t profit from consumers’ efforts to protect themselves.”

SB 823 would amend the California Consumer Credit Reporting Agencies Act by removing the authorization for credit agencies to charge up to $10 to place or lift a credit freeze. The legislation will also ensure that credit freezes can be requested via the internet; current law allows credit agencies to require that requests be made by traditional mail. In addition, the bill has a “one-stop” provision to enable consumers to freeze their credit with all three major credit agencies by simply initiating a freeze with one of them. This streamlined approach would allow the consumer to use a single password or pin to control their credit freeze.

Concerns about the vulnerability of consumers’ credit history as well as their personal and financial data mounted with the news last September of the massive hack of the credit reporting agency Equifax. The incursion, which was not made public until several months elapsed, exposed the personal data and credit information of more than 145 million consumers including names, social security numbers, birth dates and driver’s license numbers.

“It added insult to injury last year when consumers had to pay to lock down their credit reports after the Equifax data breach,” said Lee Harris, Consumer Attorneys of California president. “Credit reporting agencies control a treasure trove of sensitive information about all of us. When that trust has been violated, it's not asking too much for credit agencies to help restore our privacy and protection without making the victim pay.”

“The credit reporting agencies did not ask consumers permission to collect our personal information, they are profiting off of selling our information to other businesses, and Equifax did not even keep our information secure,” said CALPIRG Executive Director Emily Rusch. “Consumers shouldn't have to contact three different companies and pay $30 to protect ourselves from identity thieves. We look forward to working with Senator Hill to ensure credit freezes are a free and easy tool for consumers to use to protect ourselves.”

There are three major credit reporting agencies – Equifax, Transunion, and Experian. Experts say security freezes are most effective if placed with all three credit agencies – a move that would cost $30 to freeze credit and another $30 to thaw it when needed, because current California law allows the agencies to charge up to $10 to impose or lift a security freeze. Security freezes are free only in certain circumstances. State law allows Californians older than 65 to obtain a credit freeze without charge, but they must pay $5 to unfreeze their credit. Freezes also are free for victims of identity theft who have filed a police report.

According to the U.S. Public Interest Research Group, only four states allow free credit freezes and thaws – Indiana, Maine, and North and South Carolina. U.S. PIRG also reports that 158 million consumers live in states that allow the fees, and if all adults ages 18 to 65 in those states placed security freezes on their credit, it would cost them $4.1 billion.

The hacking of credit reporting agency Equifax was the latest incident in a disturbing trend.

Other recent massive data breaches involved:

• Yahoo: At least 3 billion accounts were compromised in 2013, exposing names, email address, birth dates, telephone numbers and passwords.
• EBay: 145 million users’ names, addresses, birth dates and passwords were comprised when the firm was hacked in 2014.
• Target: 70 million customers were affected by the exposure at the height of the December 2013 holiday season of personal information that included street addresses, email addresses and telephone numbers.
• Federal Office of Personnel Management: The personal information of 22 million federal workers, including sensitive data such as security clearances and social security numbers, was compromised in 2015.
• Anthem: At least 78 million Anthem customers’ names, social security numbers and birth dates and other personal information related to their medical records were exposed in a 2015 data breach.
• Experian/T-Mobile: 15 million T-Mobile customers’ names, social security numbers, dates of birth, addresses and driver’s license numbers were stolen by hackers who breached the data system of Experian, which processed T-Mobile credit applications.

“Fraud and identity theft can hurt every segment of our economy – but the greatest damage befalls the consumer,” Senator Hill said. “Californians should have the right to protect themselves from being victimized by these crimes without.”

Resources

Fact Sheet: http://sd13.senate.ca.gov/sites/sd13.senate.ca.gov/files/sb_823_credit_report_freeze_factsheet.pdf

The text of the bill will be available within 24 hours at http://leginfo.legislature.ca.gov/