Under pressure in the wake of a massive data breach, Equifax Inc. will debut a new service that will permanently give consumers the ability to lock and unlock their credit for free.
The service will be introduced by Jan. 31, CEO Paulino do Rego Barros Jr. wrote in a Wall Street Journal op-ed Wednesday, a day after taking the helm. The company will also extend the sign-up period for TrustedID Premier, the free credit-monitoring service it’s offering all U.S. consumers, he said.
“The service we are developing will let consumers easily lock and unlock access to their Equifax credit files,” Barros wrote. “You will be able to do this at will. It will be reliable, safe and simple. Most significantly, the service will be offered free, for life.”
Barros was named interim CEO on Tuesday, less than three weeks after Equifax disclosed that hackers accessed sensitive data for 143 million U.S. consumers. Former CEO Richard Smith will appear before Congress next week, and lawmakers have demanded more information on how the breach happened, while faulting the company’s efforts to alert victims and help them safeguard their finances.
“We compounded the problem with insufficient support for consumers,” Barros wrote in an op-ed posted online by the Wall Street Journal. “Answers to key consumer questions were too often delayed, incomplete or both. We know it’s our job to earn back your trust.”
TransUnion, a rival credit-reporting company, also offers a free credit lock called TrueIdentity “and we have for some time,” company spokesman David M. Blumberg said in an emailed statement. He said the service allows customers lock or unlock credit reports online or using an app. A representative for Experian Plc, another rival, didn’t immediately return a message seeking comment.
Enabling consumers to easily turn off credit locks could help lenders including Synchrony Financial and Ally Financial Inc., Vincent Caintic, an analyst at Stephens Inc., wrote in a note Wednesday.
“We think this will alleviate concerns that consumers freezing their credit access from the bureaus will slow loan origination growth and increase customer acquisition costs,” Caintic said. “We have been most concerned about credit cards, particularly those applied at the point of sale, as well as auto lending at dealerships.”
Equifax’s free services are likely to hit fees at its global consumer solutions unit. That division produced $402.6 million in revenue in 2016, or 13 percent of the company’s total, in part from monitoring products such as Equifax Complete, ID Patrol, Credit Watch and Score Watch. The unit also sells credit information to resellers who offer their own monitoring services to individuals.