By Dave Williams
ATLANTA - Charging Georgia consumers $10 every time they order a freeze on their credit would discourage most from acting to protect themselves from identify theft, an Ivy League business professor told state lawmakers Thursday.
But an executive with one of three national credit reporting companies said the fee proposed in legislation now before the General Assembly is reasonable, considering what the industry has to do to provide the service.
Two House subcommittees met Thursday to consider a bill allowing Georgians worried about having their credit card information stolen to order a credit freeze from one, two or all three of the credit reporting agencies.
The companies would have three business days to comply.
Consumers then could have the freeze temporarily lifted, perhaps to make a major purchase, in an electronic transaction that the credit agencies would have only 15 minutes to carry out.
The companies would have three days to comply with an order to permanently lift the freeze.
Thirty-three states already have credit-freeze laws on the books, said Rep. Calvin Hill (R-Canton), chairman of one of the subcommittees and the bill's sponsor.
Of those states, 22 allow the companies to charge consumers up to $10 for an initial credit freeze order, six charge $5 and only five states require the industry to provide the service for free, he said.
Hill said most consumers concerned enough about the security of their credit to consider ordering a freeze probably can afford the $10 fee.
"If you want to steal someone's credit, you want to steal someone's who has a high credit limit," he said.
But Eric Eisenstein, a professor from Cornell University, said research shows that many victims of identify theft are not wealthy.
He said identify thieves often prey upon the easiest targets, including the elderly.
"Rich people are better targets. But rich people protect themselves better," he said. "Some of these [victims] may be poor ... What you don't want to do is price them out of the market."
Some subcommittee members also noted that while $10 doesn't sound significant, consumers often end up paying as much as $60 for a credit freeze. Under the Georgia bill, that's what it would cost a husband and wife with a joint account to order a freeze from all three credit reporting agencies.
Eisenstein suggested that consumers would be more likely to purchase credit freezes, if the fee was lowered to $3 to $5 for an initial order and $1 to $3 to lift a freeze.
But Kirby Thompson of Equifax, one of the credit reporting companies, asked lawmakers to stick with $10 for the sake of consistency with most other states with credit freeze laws.
Thompson also argued that the higher fee is reasonable because of the additional technology necessary for a system that allows consumers to freeze and then thaw their credit.
"We've built this system," he said. "Then, you've asked us to build a toll road so you can go back and forth. There's a cost to travel."
Thompson also hinted that another state law might not be necessary. He said Equifax and the other companies are moving to voluntarily launch credit freeze systems in those states without a freeze law.