A Cobb County Democrat whose wife was a credit card fraud victim is angling to give Georgia consumers the right to bar anyone from accessing their credit reports without written permission.

House Bill 966 drafted by state Rep. Rob Teilhet (D-Smyrna) has bipartisan support and, if enacted, would add Georgia to a list of a dozen states, including Texas, North Carolina and California, with similar laws. It is scheduled for a hearing today at a meeting of the House financial institutions subcommittee, A second measure, House Bill 1389 drafted by Rep. Tommy Benton (R-Jefferson), would create similar protections for consumers.

Credit-freeze idea not acceptable-companies retort

However, the so-called credit-freeze idea faces steely opposition from Atlanta-based credit reporting giant Equifax Inc., the Georgia Chamber of Commerce and the Georgia Retail Association. Opponents say credit freezes create more red tape for consumers. They say it can be confusing to consumers and add that it won't necessarily stop a thief from assuming another person's identity. Thieves who obtain personal information by rifling through a trash can or a mailbox can still do damage by opening bank or utility accounts with companies that don't check credit reports. They also could cause non-credit damage by taking a job using someone else's identity if the employer doesn't conduct a thorough background check.

"A file freeze, that's an extreme measure that may create more problems than it solves," said Rod Griffin, manager of public education at Experian, one of the nation's largest credit reporting firms. The company has not taken an official position on either bill, but Experian has opposed similar proposals in other states.

"Credit reports aren't involved in every transaction that's made," he said.

Both bills would let consumers block credit reporting agencies from releasing credit reports to third-party firms. Department stores, banks, mobile-phone operators and other businesses pull credit reports to evaluate a potential customer's ability to repay debt.

How is it likely to work?

Consumers who opt to freeze their reports would be assigned a personal identification number - different from their Social Security number - they would use to lock or unlock their accounts. Under Teilhet's bill, credit reporting agencies would be allowed to charge up to $10 per freeze and up to $12 to unfreeze a report when a consumer gives permission for the report to be viewed by a specific creditor. Benton's proposal would bar such fees.

Currently, identity theft victims can place fraud alerts on their accounts for up to seven years at a time. Alerts signal to creditors that the applicant may be an impostor. But Teilhet said he wants to give consumers a permanent option. "I know a lot of victims," Teilhet said in a recent interview. "It's among the fastest growing white-collar crimes in Georgia with about 250,000 new victims in Georgia a year."

Statistics speak

Federal Trade Commission statistics show new cases of identity theft cost businesses more than $33 billion a year. That's about $10,200 per victim nationwide. Those statistics, Teilhet said, make it hard for him to understand why businesses would oppose an early warning to possible fraud.

"To the extent that the Georgia Retail Association has taken that position - and the [Georgia] chamber - it's the wrong position to take, and it works against the interest of many of their members. Benton, who drafted his bill after a constituent became an identity theft victim, said he is hopeful that some credit freeze legislation is enacted.

"I don't know why anybody would oppose it unless there's something that somebody reads into it that I don't see. ... If the [Georgia] chamber and retailers can come up with something better, we'll listen to that, too," Benton said. Opponents insist they have consumers' best interests in mind. "We're afraid people will not realize the full impact" of what freezing entails, said John Heavener, president of the Georgia Retail Association.

Account freezing complicates processes

Freezing an account means a consumer who later wants a car loan or mortgage will have to unfreeze it beforehand, adding a burdensome extra step, he said. Consumers, he argued, also wouldn't be able to take advantage of instant credit promotions or discounts that come with opening an account at a department store or home electronics retailer.

"A large part of every retailer's business is their credit accounts, and we'd like that their credit accounts - as long as it's well-managed by the retailers - be unfettered by this process." He added that people who have bad credit would try to abuse the proposed law to hide their histories.

Equifax, which has some 220 million consumer files, unsuccessfully lobbied against credit-freeze measures enacted in other states. It argued against Teilhet's bill in an earlier subcommittee hearing. "The key is not if we're for or against file freezes, the question becomes is it appropriate to have 50 different laws on the books with 50 different standards," said David Rubinger, an Equifax spokesman.

The companies say existing federal law such as the Fair and Accurate Credit Transactions Act, which gives consumers the right to obtain one free credit report a year from each credit reporting firm, allows them to watch for signs of trouble. And consumers also have the right to place fraud alerts on their reports. Teilhet countered that existing federal legislation doesn't go far enough. "Anybody that's gone through this would agree," Teilhet said. "Equifax makes money every time they get a request for someone's credit report. It's a revenue source for them. They're the only other entity other than the identity thief that profits from identity theft."

But Equifax, Experian and others in the credit freeze debate say their opposition has nothing to do with revenue concerns. "Equifax believes we're as big of a victim as anybody else," Rubinger said. "When there's a case of identity theft, it scuffs up or makes our files inaccurate. We're in the business of providing accurate information."

Congress is mulling the possibility of passing a national freeze law, which Rubinger said is preferable to states enacting a myriad of regulations. "If we had a choice between the two, we would support one over the other," Rubinger said. "We're trying to do what's best for the consumer and the business."