Markets & Economy

Why do Californians pay more for a credit report security freeze?

There’s no answer...why? Let me explain!
  • Millennials may be misinformed about how to handle their credit profile
  • In California it costs $30 ($10 per CRA) each time you request a credit freeze
  • The service is free if you’re a resident of Colorado, Maine, New Jersey, New York, North Carolina and South Carolina

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A little background: What is a credit report security freeze?

It’s basically taking control of our historical data at the three CRAs (Experian, Equifax and TransUnion).

I recently wrote a story about the T-Mobile & Experian data breach. I explained what a credit freeze does.

Today, I want to write more about us Californians, and how we as professionals can better the lives of the communities we serve.

Identity theft is a horrifying experience. Becoming a victim is costly; not only in the loss of time, but also in the loss of precious-saved money. Ask a sufferer — it changes lives.

Requesting a credit report security freeze (CRSF) is a good idea for everyone. However, it’s imperative to a person who receives notice of a data breach. A CRSF is the only tool to truly shield ourselves from, and lessen the damages of, an actual identity theft.

Californians pay for it, but others states don’t?

The service is free if you’re a resident of Colorado, Maine, New Jersey, New York, North Carolina and South Carolina. As a Californian, it costs $30 ($10 per CRA) each time you request a credit freeze. For example, if you give permission to access your credit file to an auto dealer, lender or for a rental application, you must end the credit freeze. After the inquiry is made, an additional $10 per CRA is required to re-activate the freeze.

According to recent U.S. census data, California is reaching 38 million people. The combined population of all six states above (where credit freezes are free) is 48 million. We pay, they don’t.

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I have posed this question many times over the years, even in writing to one of my city councilmen. I was told that California doesn’t get enough snow to freeze all of our credit reports — ha! Not really. He wrote back telling me that it was done before his time. (I think his reply is more comical.)

Where do we, and the millennials, go from here?

As real estate and lending professionals in our beloved state, we need to act.

For many years now, our education system has hardly touched on the subject of personal finance and has forced us to pay a hefty price to learn how to manage and protect our historical credit file. Unfortunately, we are not alone.

Millennials have a bigger problem. Even though they absorb financial concepts much faster, most have their personal data on the streets. Regrettably, reputable financial institutions, unknowingly at times, continue to misinform our youth. Which leads to many of them having poor credit profiles.

I don’t have all the answers on how to go about changing the mind of our politicians, but action is necessary.

Please comment on how this can be solved?

Let’s go viral, and turn this bad policy into an opportunity to educate, empower and prosper!

Nabil Captan is the founder and CEO of Captan and Company. You can follow him on Twitter @nabilcaptan or on LinkedIn.