opinion

Why are Iowans paying so much to freeze their credit?

Kudos to Iowa Attorney General Tom Miller for offering legislation to ban credit reporting agencies from charging Iowans fees to "freeze" credit. Freezing prevents anyone, including an identity thief, from opening a new line of credit on behalf of a consumer. The bill also prohibits charges to lift, suspend or reinstate credit freezes.

These costs, allowed under state law, are the highest in the nation, according to his office.

All lawmakers should support Miller’s legislation. They should pass it and Gov. Kim Reynolds should sign it into law. Iowans are being taken to the cleaners by huge credit reporting agencies that keep records on all of us, whether we want them to or not.

Anyone who has a credit card, line of credit or bank loan has a record with a credit reporting agency. The three major companies — Equifax, Experian and TransUnion — may know more than your spouse about your finances and debt.

In the massive Equifax breach last year, hackers stole Social Security numbers, birth dates, addresses and other personal information from 1.1 million Iowans and an estimated 143 million Americans.

That’s more than half the adults in the country.

Feeling the need to do something, many Iowans rushed to freeze their credit. People quickly realized this was easier said than done. It requires contacting all three credit reporting bureaus. Following the Equifax breach, consumers were met with crashed websites and jammed phone lines. Months later, it can still take hours to complete the task.

In addition to the hassle, Iowans pay $10 per person to each agency. (The temporary waiving of fees by Equifax ends this month). This means an Iowa couple coughs up $60 to spend an afternoon hunched over the computer, glued to a telephone or both to prevent unauthorized access to their credit report.

“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.”

Because state laws dictate whether and how much credit reporting agencies can charge, consumers in each state may pay different amounts for exactly the same service. In Georgia, residents pay $3 for a “standard” freeze. In Maryland, the cost is $5. But Iowa law allows a $10 fee.

Times three for three agencies. And times three again if a consumer wants to permanently remove the freeze. And Iowans can be charged $12 — the highest fee in the country — to temporarily suspend the freeze if they want to apply for a credit card, loan or job that requires a background check.

“There are states that prohibit these fees, and that list is growing following the Equifax breach,” said A.G. spokesman Geoff Greenwood.

Indiana, Maine and Washington, D.C., do not allow charges to be imposed on any residents. Michigan, Ohio and Illinois have pending proposals to remove the fees altogether.

Iowa should follow suit.

This editorial is the opinion of The Des Moines Register’s editorial board: David Chivers, president; Carol Hunter, executive editor; Lynn Hicks, opinion editor; and Andie Dominick, editorial writer.