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January 4, 2018

Miller Proposes Legislation to Eliminate Credit Freeze Fees

Current fee allowed by Iowa law to temporarily lift credit freezes is highest in nation

(DES MOINES, Iowa) Attorney General Tom Miller is proposing legislation to eliminate fees most Iowa consumers now pay to freeze unauthorized access to their credit reports, as well as fees credit reporting agencies can charge Iowans to undo the freeze, which are currently the highest in the nation.

Miller’s pre-filed bill in advance of this year’s legislative session follows the massive Equifax data breach disclosed in September, affecting 1.1 million Iowans and 143 million consumers nationwide.

While Equifax agreed to temporarily waive its credit freeze-related fees following heavy criticism by the public, state attorneys general—including Miller—and federal lawmakers, most Iowa consumers still must pay to freeze and lift credit report freezes from each of the two other major credit reporting agencies (CRAs)—Experian and TransUnion.

Credit Freeze

A credit freeze restricts access to a consumer’s credit report. The freeze makes it more difficult for identity thieves to open new accounts under a consumer’s name, because lenders generally review a consumer’s credit history before extending credit. A consumer who freezes a credit report can temporarily lift the freeze when applying for credit or a job that requires a credit background search, and can also request to permanently remove the freeze.

Iowa’s Allowable Temporary Lift Fee Highest in Nation

Credit freeze-associated charges vary by state, and several states prohibit certain fees. While Iowa law forbids CRAs from charging credit freeze-related fees for confirmed identity theft victims, the law permits CRAs to charge most Iowans $10 to freeze their file, $12 to temporarily lift a freeze, and $10 to permanently remove one. Iowa’s allowable temporary lift fee is the highest in the nation.

A consumer who freezes all three files pays a total of $30 to place freezes, $36 to temporarily lift them, and $30 to permanently remove them.

“I just don’t think these fees are fair to Iowa consumers, and the Equifax case is Exhibit A,” Miller said. “If a company you have no control over exposes your personal information through negligence or as a result of someone else’s criminal act, you shouldn’t get left holding the bag simply because you want to protect yourself from identity thieves through credit freezes.”

Other Proposed Consumer Protection Legislation

In other proposed legislation pre-filed separately, Miller:

  • Seeks to update Iowa’s security breach law to account for the changing technological landscape and to close a loophole with respect to notifying the Consumer Protection Division about data breaches
  • Recommends providing for enforcement of tenant rights through the Consumer Fraud Act and require a landlord to provide a legitimate and material reason for terminating (or not renewing) a tenant in a manufactured housing community or mobile home park
  • Urges veterans benefits legislation aimed at curbing some abuses prohibited by federal law, but which are not prohibited under Iowa law

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