The New York State Senate today passed legislation to protect consumers from financial security breaches that continue to happen to millions of New Yorkers. The measure (S6886D), sponsored by Senator Rich Funke (R-C-I, Perinton), makes it easier for consumers to protect their credit information by prohibiting all consumer credit reporting agencies from charging a fee for the placement, lift, or temporary removal of a security freeze.
Senator Funke said, “As a member of the Consumer Protection Committee, it is my job to protect consumers by making sure they are not being taken advantage of. When the personal information of consumers is put at risk in a data breach, they should not be penalized by incurring additional fees from the very agencies that were supposed to protect them.”
A security freeze protects personal information from credit fraud and identity theft by preventing access to credit files. Under current law, residents are not charged for the placement of their first security freeze, but each credit reporting agency can charge up to $5 for a second or further credit freeze. In addition, there can be a charge of up to $5 from each credit reporting agency for the temporary lifting of a credit freeze - an approach that is often used when an individual knows that they are about to apply for a new credit card, mortgage, or other loan.
On September 7, 2017, consumer credit reporting agency Equifax was the latest in a long list of companies that made the public aware of a security breach in its database. Individual personally-sensitive information, such as birthdays and Social Security numbers, of 143 million consumers was compromised. As a result, many New Yorkers are being urged to place security freezes on their credit reports.
This legislation will strengthen consumer protections by ensuring that individuals do not bear the cost of the many security freeze transactions that they are likely to undertake in the wake of the Equifax or any similar data breach. Not only would this allow consumers to prioritize rebuilding their financial lives without bearing the financial cost of proper protections, but also ensures that a credit bureau cannot profit from its lax data security.
The bill will be sent to the Assembly.