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Equifax Settles Consumer Protection Charges in Indiana

Attorney General accuses credit bureau of not providing security freezes

December 17, 2008

In a recently approved consent judgment, Attorney General Steve Carter obtained a consent judgment after charging that the credit agency failed to place security freezes and failed to issue freeze confirmations and unique personal identification numbers to Indiana consumers within the timeframes as defined by state law.

It is believed that the Indiana Attorney General's Office is the first to enforce the consumer credit freeze statute against one of the three national credit reporting agencies.

"This law was enacted to give consumers a layer of protection against identity theft and other forms of personal identity fraud," said Carter. "The freeze doesn't provide the protections it was designed to give our citizens when the required timeframes and other requirements of the law are not followed."

Indiana's credit freeze law took effect on September 1, 2007. Credit reporting agencies such as Equifax, TransUnion and Experian are required to place a freeze on an individual's credit report within 5 business days of receiving his/her written request.

The law also requires that reporting agencies provide the consumer with freeze confirmations and PINs with instructions for temporarily lifting or permanently removing a freeze within 10 days of receipt of the customer's request. Consumers can use this unique PIN at any time to apply for new credit or to access their credit report.

Under the court filed consent judgment, Equifax has agreed to comply with Indiana's credit freeze law, including the required timeframes. Equifax has also agreed to pay $65,000 to the Office of the Indiana Attorney General's Consumer Protection Fund.

Indiana has one of the strictest credit freeze laws in the country. The consumer does not have to pay a fee to place, lift, or remove a freeze. Written requests are required to change the status of a freeze. There are about 40 states that currently have a similar law allowing credit freezes.

A freeze can be lifted for a specific period of time or for a specific third party as instructed by the consumer. This allows someone to obtain credit from a particular business or to unfreeze a report in order to compare rates from competing lenders. A reporting agency must lift a credit freeze within three business days of receiving a request to do so from the consumer.

Carter said the law will be enhanced in 2009, expanding methods of contacting credit reporting agencies from mail requests to include e-mail.

The law does enable some entities access to reports despite a freeze such as insurance companies, existing creditors and law enforcement agencies.

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