Around Rhode Island: A bill to help  fight fraud

Around Rhode Island: A bill to help  fight fraud

The Westerly Sun

The history of the three credit-reporting bureaus has transformed since the first credit bureau was created in the 1800s.

Today, the three major credit reporting bureaus (agencies), Equifax, TransUnion and Experian, collect personal credit information on hundreds of millions of American consumers annually.

The ability of consumers to obtain and hold credit and maintain a credit score to obtain loans, be issued credit cards and open accounts is a necessity. However, consumers have no control over the personal data each agency collects on them. Consumers have no control or protection on how, who has access to or when their data is sold or accessed by potential creditors.

This information can used by marketers to solicit consumers. Under the federal Fair Credit Reporting Act, consumers do have protection on the accuracy of the data and are permitted access to the credit information collected and reported by these agencies.

In the past several years, hundreds of millions of consumers' information has been presumably stolen through a litany of internet database breaches or hacks.

In May 2017, one of the largest breaches included the credit bureau Equifax. In the Equifax breach, 143 million consumers' personal data (Social Security numbers, home addresses, credit card numbers, driver's license numbers and birth dates) may have been stolen. This type of data has been commonly used to steal the identity of innocent consumers globally.

Correcting problems associated with identity theft can cost consumers thousands of dollars, hundreds of hours of time and result in a low credit score, rendering their ability to obtain credit very difficult. Consumers have an option, for a fee, to hire a third party credit-monitoring company to alert them when an account has been opened in their name. Consumers also have the option of freezing their credit with the three reporting agencies. A freeze prohibits a credit check with the reporting agency and thwarts any nefarious new account activity.

The process is relatively easy and can be accomplished via the telephone or the internet. Upon initiating a freeze, the reporting agency will issue the requesting consumer a lengthy personal identification number that can be used to reverse the credit freeze process by thawing the account. The thaw process gives consumers the option to allow any or certain creditors to pull their credit or to limit it to be exposed for a set period of time or virtually in perpetuity.

The ability to freeze and thaw credit is a baseline defensive mechanism to prevent identity theft and to protect the consumer. However, each reporting agency charges a fee between $5 and $10 to freeze credit and to subsequently thaw credit.

Unless the consumer knows what agency will be used for the credit check, they must thaw their account with all three reporting agencies and incur a fee for each one. Note that these fees are waived in some instances for victims of identity theft or if the consumer is 65 or older.

Consumers and Rhode Islanders need to be afforded the ability to control unfettered access to the important data collected by the credit agencies. Therefore, I have introduced legislation (H7078) to eliminate the imposition of credit freeze and thaw fees by the credit reporting agencies.

The consumer protection legislation will give Rhode Islanders control as to how long, who has access to, and when their very important credit information is made available to creditors without incurring a fee.

Consumers and Rhode Islanders need to be afforded the ability to control unfettered access to the important data collected by the credit agencies.

Rep. Ken Mendonça is a Republican representing House District 72, Portsmouth and Middletown. He is a member of the House Committee on Finance and the House Committee on Veterans' Affairs.



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