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In a response to the massive Equifax data breach, the Illinois Senate today passed House Bill 4095, sponsored by Senator Bill Cunningham, with a unanimous bipartisan vote (56-0). The legislation bars credit reporting agencies from charging consumers a fee to place or lift a freeze on their credit report. The bill, sponsored by Representative Greg Harris in the House, passed the House with unanimous bipartisan support (109 yes, 0 no) in the fall.
“Companies that collect our personal and financial information and fail to protect it from cybercriminals should have to pay for credit freezes in the aftermath of a breach,” Attorney General Lisa Madigan said. “It’s common sense to require companies that hold our information to help people take the most important step to prevent identity theft and freeze their credit.”
“Unfortunately it is no longer a matter of ‘if’ you become a victim of identity theft, but ‘when’ you become a victim of identity theft, and when one of the best ways to protect yourself is a credit freeze, fees should not stand in the way,” Senator Cunningham said. “I urge the governor to quickly sign this bill to eliminate fees for consumers who want to place a freeze on their credit.”
A credit freeze prevents new account identity theft by stopping credit reporting agencies from sharing a consumer’s credit report with potential new creditors. Most creditors will not issue new credit to a customer without a credit report from at least one of the big three credit reporting agencies. Credit monitoring services, often peddled to consumers in the wake of data breaches, provide inferior protection: they only alert consumers once identity theft has occurred.
"Making credit freezes free for all Illinois residents is the first of multiple steps the General Assembly should take to respond to the Equifax breach, which placed an estimated 5.4 million Illinois residents at heightened risk of identity theft," said Illinois PIRG Director Abe Scarr. "While congress debates weakening consumer protections, it is more important than ever that states take the lead in providing vital consumer protections."
House Bill 4095 makes it easier for consumers to protect themselves from identity theft by eliminating the fees charged by credit reporting agencies to place or lift a freeze on their credit report. Current state law allows credit reporting agencies to charge consumers $10 to freeze or thaw their credit report; fees are currently waived for residents 65 and older, active service members, and victims of identity theft with a police report. Indiana, Maine, North Carolina and South Carolina already allow all residents to freeze and thaw their credit reports for free.
"Given recent data breaches, there has never been a more critical time for this legislation," says Jody Blaylock, Senior Policy Associate with Heartland Alliance. “We must ensure that people, especially those experiencing poverty, can protect their credit and continue to build financial security."
The free credit freeze legislation is supported by Attorney General Lisa Madigan, AARP Illinois, Center for Changing Lives, Citizen Action Illinois, Digital Privacy Alliance, Heartland Alliance, Housing Action Illinois, Illinois PIRG, Navicore Solutions, Working Credit and Woodstock Institute.
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