Senator Warren Launches Bill Aimed At Equifax
U.S. Senator Elizabeth Warren, along with 11 other Democratic senators, has introduced a bill to allow consumers to freeze their credit for free after a massive data breach at Equifax. The proposed bill would stop companies like Equifax from charging consumers to freeze their credit files. However, with a Republican-controlled Congress, it will be a steep uphill battle to get the bill passed.
Credit freezes are recommended if you think your Social Security number has been compromised. A credit freeze prevents the agencies from providing your credit history to potential creditors. You can temporarily lift your freeze if you want to legitimately get a credit card or rent a new apartment.
Freezing your credit files prevents thieves from applying for credit using your information. Every state varies in how much they allow these companies to charge for a freeze. Equifax has agreed to give free credit monitoring to hack victims, but did not say it would waive fees to freeze credit.
Equifax creates individual credit reports used by lenders to assess a consumer’s creditworthiness. The Equifax data breach exposed the sensitive information of some 143 million people. The hack is considered one of the largest hacks ever.
The company disclosed the breach more than a month after it learned of it on July 29. Under intense criticism for what has been described as a slow, inadequate response, the company has hired public relations companies DJE Holdings and McGinn and Company to manage its reply to the hack. Equifax’s stock is down more than a third since the company disclosed the hack on Sept. 7.
The senate has opened an investigation into the breach. Connecticut Attorney General George Jepsen and more than 30 others in a state group are also investigating the breach. Canada has also said that it was opening an investigation. Equifax is still working to determine the number of Canadians affected. Data on up to 400,000 Britons was also stolen in the hack
Warren has built a reputation as a fierce consumer champion. She helped create the Consumer Financial Protection Bureau (CFPB) in the wake of the 2007-2009 financial crisis. Warren wants to ensure closer federal oversight of credit reporting agencies. Credit reporting agencies are not subject to the same scrutiny as mortgage lenders or credit card providers. The CFPB supervises credit reporting firms’ compliance with consumer protection laws but does not directly monitor the companies.
The chairman of the Senate subcommittee on Social Security, Republican Bill Cassidy, and ranking member, Democrat Sherrod Brown, have urged the Social Security Administration to consider nullifying its contract with Equifax and making the company ineligible for future government contracts. For 2016, state and federal governments accounted for 5 percent of Equifax’s $3.1 billion in total revenue.
Get Analysts' Upgrades and Downgrades Daily - Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.