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New version of credit freeze takes hard cap off transaction fees

ATLANTA - Consumers who order freezes on their credit to ward off identity theft couldn't be charged more than the cost of the service under legislation passed by the Senate Tuesday.

That likely would mean lower fees than the $3 per transaction the three national credit reporting agencies would be allowed to collect under a bill the House approved three weeks ago, said Sen. Chip Rogers, the Senate bill's chief sponsor.

Rogers, R-Woodstock, cited an industry expert who testified to a House committee last fall that it costs the companies less than $1 to process a credit freeze.

"We should not set in stone a $3 fee if that's not what it costs to provide it," he said. "This makes sure the companies aren't making a profit on this."

But other senators questioned a provision in Rogers' bill that would leave it up to the state's commissioner of banking and finance to set the fee based on what it costs to process a credit freeze.

"If you had a $3 fee, you would know exactly how much it's going to be," said Sen. Renee Unterman, R-Buford. "When you put it the hands of someone else ... you're just throwing it out there for another free-for-all."

Consumer advocates also expressed concern about the uncertainty of not setting a hard cap on fees.

"What's the process for the banking commissioner to arrive at a fee?" asked Allison Wall, executive director of Georgia Watch. "Thirty-nine states have a credit freeze. None of them use this mechanism."

But Rogers said he opposes placing a hard cap on fees because the cost of transacting credit fees is expected to decline over time as more consumers order them.

"The more people who sign up for it, the lower the cost would be," he said.

Before passing the bill Tuesday, senators defeated an amendment proposed by Sen. Emanuel Jones, D-Decatur, calling for a hard cap of $3 per transaction.

But Rogers' bill likely faces a dubious reception in the House, where lawmakers amended the legislation on the floor to reduce the fee from $10 in the original version of that bill to $3.

They likely will be reluctant to go along with the uncertainty created by allowing a state official to set the fee.

"This complicates the matter," said Kathy Floyd, advocacy director for the senior citizens' group AARP Georgia. "It may delay making this tool available."