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Bill to regulate credit reports charges through first hearing

Much to the surprise of the bill's sponsor, a measure to help consumers who find errors on their credit reports survived its first committee hearing Thursday.

"For a bill that was definitely dead, I'm pretty pleased," said Rep. Paul Hawkes, R-Crystal River.

The bill, filed in response to constituent complaints and a Consumer Reports study indicating that nearly one in five credit reports includes a serious error, is alive. But some of its stronger provisions were taken out to quell objections from powerful lobbyists for credit bureaus, banks and other creditors.

Hawkes said, however, that its heart is still beating.

That heart is a penalty of at least $500 to anyone who knowingly reports incorrect information on a credit report. Federal laws that regulate the industry provide penalties only for credit bureaus, not for creditors who fail to correct errors after they have been pointed out.

Creditors and bureaus say they gain nothing by reporting wrong information, but many consumers say they have been terribly frustrated trying to get errors corrected.

"For the first time ever, credit agencies and merchants have a real incentive to work with consumers," Hawkes said.

Under the bill, consumers would have to pay no more than $8 for a credit report, which now costs as much as $20.

Removed from the bill was a provision that would have forbidden credit bureaus from selling mailing lists culled from credit files. Lobbyists said that would have put direct mail firms out of business. Another deletion was a measure to require creditors to tell consumers when they were about to put negative information in their credit file; that was said to be too cumbersome.

During the hearing before the House Commerce Committee, Rep. Mary Figg, D-Lutz, said she wants to require credit bureaus to provide credit reports that consumers can understand. She said she'll try to add that provision before the bill goes to the full House.

Hawkes said with Thursday's success, he's optimistic he can get the main provisions of his bill heard in the Senate, where there is no companion bill.

"I'm feeling very confident now," he said. "It's a good bill. It will make a difference."