Bill S6682B-2013

Relates to credit record freezes and protected minors

Relates to credit record freezes and protected minors.

Details

Actions

  • Jun 17, 2014: SUBSTITUTED BY A8955B
  • Jun 9, 2014: AMENDED ON THIRD READING 6682B
  • Mar 25, 2014: AMENDED ON THIRD READING 6682A
  • Mar 12, 2014: ADVANCED TO THIRD READING
  • Mar 11, 2014: 2ND REPORT CAL.
  • Mar 10, 2014: 1ST REPORT CAL.245
  • Feb 26, 2014: REFERRED TO CONSUMER PROTECTION

Calendars

Memo

BILL NUMBER:S6682B

TITLE OF BILL: An act to amend the general business law, in relation to credit record freezes and protected minors

PURPOSE OF BILL:

The purpose of this bill is to create a mechanism whereby parents or guardians can place a freeze on the credit record of a minor child in order to prevent their child from becoming a victim of identity theft.

SUMMARY OF PROVISIONS:

Section one amends the general business law by adding new definitions to the Fair Credit Reporting Act, defining "protected consumer", "record", "representative", "security freeze for a protected person", "sufficient proof of authority", and "sufficient proof of identification".

Section two amends the general business law by adding new provisions providing a mechanism for parents and guardians to freeze the credit record of their minor children. This section requires credit reporting agencies to place a credit record freeze on the account of a minor, at the request of a protected minor's representative who can provide sufficient proof of identification and sufficient proof of authority to act on behalf of the minor child. The credit reporting agency would be entitled to a reasonable fee to cover administrative costs related to such requests. If the credit record of a minor is frozen pursuant to this section, a consumer reporting agency will be prohibited from releasing the minor's report, or any information derived there from, to any third party, except in limited circumstances as required by law. A security freeze could be removed by the protected minor's representative, by the protected minor upon attaining the age of sixteen, or by the reporting agency upon a finding of a material misrepresentation of fact. The bill further provides that the exclusive remedy for a violation of these new provisions is an action commenced by the attorney general.

Section three provides for the effective date.

JUSTIFICATION:

According to the Federal Trade Commission (FTC), a child's social security number can be used by identity thieves to apply for government benefits, open bank and credit card accounts, apply for a loan or utility service, or rent a place to live. According to a 2011 report from ID Analytics, an identity theft protection firm, an estimated 140,000 minors are at risk of becoming victims of identity theft each and every year. Another 2011 study, from CyLab, a research center at Carnegie Mellon University, examined 43,000 children who were registered with a commercial identity protection service and found that 10% of them had someone else using their social security number. The FTC advises parents to check their children's credit reports to see if their personal information is being misused, and to take immediate action if it is. However, no mechanism currently exists for parents of children in New York state to take proactive measures to protect their children's credit.

Current law allows a parent to freeze the credit of a child, only after a file already exists in the child's name. Often times this file exists because the child has already been the victim of identity theft. This bill would bring New York state law in line with state laws in Maryland, Delaware, Michigan, Wisconsin, Illinois, Texas and Oregon, which require credit reporting agencies to allow a parent to freeze their child's credit even when no file exists, thereby averting the potential for identity theft to occur in the first place. Florida, Pennsylvania, Virginia, and Indiana currently have similar legislation pending.

Child identity theft is a particularly egregious problem because it may go undetected for years, until the child applies for student loans, other forms of credit, or even a job. Further, child identity theft is particularly detrimental because it can postpone college admission due to student loan denials, gaining employment, accessing credit, and renting or purchasing a home. These delays can last for months or even years, until the child can dispute the fraudulent activity and have the activity cleared from their credit report. In our global world, and in light of data-sharing of our children's personally identifying information, it is imperative that parents have a way to protect their children's credit records.

FISCAL IMPLICATIONS:

None to the state.

PRIOR LEGISLATIVE HISTORY:

New bill.

EFFECTIVE DATE:

This act shall take effect January 1, 2015.


Text

STATE OF NEW YORK ________________________________________________________________________ 6682--B Cal. No. 245 IN SENATE February 26, 2014 ___________
Introduced by Sens. ZELDIN, BONACIC, DeFRANCISCO, LARKIN, MARCHIONE, MARTINS, RANZENHOFER -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, amended and ordered reprinted, retaining its place in the order of third reading -- again amended and ordered reprinted, retaining its place in the order of third reading AN ACT to amend the general business law, in relation to credit record freezes and protected minors THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 380-a of the general business law is amended by adding six new subdivisions (o), (p), (q), (r), (s) and (t) to read as follows: (O) THE TERM "PROTECTED CONSUMER" MEANS AN INDIVIDUAL WHO IS UNDER THE AGE OF SIXTEEN YEARS AT THE TIME A REQUEST FOR THE PLACEMENT OF A SECU- RITY FREEZE IS MADE. (P) THE TERM "RECORD" MEANS A COMPILATION OF INFORMATION THAT (1) IDENTIFIES A PROTECTED CONSUMER; (2) IS CREATED BY A CONSUMER CREDIT REPORTING AGENCY SOLELY FOR THE PURPOSE OF COMPLYING WITH SECTION THREE HUNDRED EIGHTY-U OF THIS ARTICLE; AND (3) MAY NOT BE CREATED OR USED TO CONSIDER THE PROTECTED CONSUMER'S CREDIT WORTHINESS, CREDIT STANDING, CREDIT CAPACITY, CHARACTER, GENERAL REPUTATION, PERSONAL CHARACTER- ISTICS, OR MODE OF LIVING FOR ANY PURPOSE LISTED IN THIS ARTICLE. (Q) THE TERM "REPRESENTATIVE" MEANS A PERSON WHO PROVIDES TO A CONSUM- ER CREDIT REPORTING AGENCY SUFFICIENT PROOF OF AUTHORITY TO ACT ON BEHALF OF A PROTECTED CONSUMER. (R) THE TERM "SECURITY FREEZE FOR A PROTECTED PERSON" MEANS (1) IF A CONSUMER CREDIT REPORTING AGENCY DOES NOT HAVE A FILE PERTAINING TO A PROTECTED CONSUMER, A RESTRICTION THAT: (I) IS PLACED ON THE PROTECTED CONSUMER'S RECORD IN ACCORDANCE WITH THIS SECTION; AND (II) PROHIBITS THE CONSUMER CREDIT REPORTING AGENCY FROM RELEASING THE PROTECTED CONSUMER'S RECORD EXCEPT AS PROVIDED IN THIS SECTION; OR
(2) IF A CONSUMER CREDIT REPORTING AGENCY HAS A FILE PERTAINING TO THE PROTECTED CONSUMER, A RESTRICTION THAT (I) IS PLACED ON THE PROTECTED CONSUMER'S CONSUMER CREDIT REPORT IN ACCORDANCE WITH THIS SECTION; AND (II) PROHIBITS THE CONSUMER CREDIT REPORTING AGENCY FROM RELEASING THE PROTECTED CONSUMER'S CONSUMER CREDIT REPORT OR ANY INFORMATION DERIVED FROM THE PROTECTED CONSUMER'S CONSUMER CREDIT REPORT EXCEPT AS PROVIDED IN THIS SECTION. (S) THE TERM "SUFFICIENT PROOF OF AUTHORITY" MEANS DOCUMENTATION THAT SHOWS A REPRESENTATIVE HAS AUTHORITY TO ACT ON BEHALF OF A PROTECTED CONSUMER. "SUFFICIENT PROOF OF AUTHORITY" SHALL INCLUDE, BUT NOT BE LIMITED TO, (1) AN ORDER ISSUED BY A COURT OF LAW; OR (2) A WRITTEN, NOTARIZED STATEMENT SIGNED BY A REPRESENTATIVE THAT EXPRESSLY DESCRIBES THE AUTHORITY OF THE REPRESENTATIVE TO ACT ON BEHALF OF A PROTECTED CONSUMER. (T) THE TERM "SUFFICIENT PROOF OF IDENTIFICATION" MEANS INFORMATION OR DOCUMENTATION THAT IDENTIFIES A PROTECTED CONSUMER OR A REPRESENTATIVE OF A PROTECTED CONSUMER. "SUFFICIENT PROOF OF IDENTIFICATION" SHALL INCLUDE, BUT NOT BE LIMITED TO, (1) A SOCIAL SECURITY NUMBER OR A COPY OF A SOCIAL SECURITY CARD ISSUED BY THE SOCIAL SECURITY ADMINISTRATION; (2) A CERTIFIED OR OFFICIAL COPY OF A BIRTH CERTIFICATE; OR (3) A COPY OF A DRIVER'S LICENSE, AN IDENTIFICATION CARD ISSUED BY THE DEPARTMENT OF MOTOR VEHICLES, OR ANY OTHER GOVERNMENT-ISSUED PHOTO IDENTIFICATION. S 2. Section 380-u of the general business law, as relettered by chap- ter 63 of the laws of 2006, is relettered section 380-v and a new section 380-u is added to read as follows: S 380-U. SECURITY RECORD FREEZE FOR PROTECTED MINORS. (A) A CONSUMER CREDIT REPORTING AGENCY SHALL PLACE A SECURITY FREEZE FOR A PROTECTED CONSUMER IF: (1) THE CONSUMER CREDIT REPORTING AGENCY RECEIVES A REQUEST FROM THE PROTECTED CONSUMER'S REPRESENTATIVE FOR THE PLACEMENT OF THE SECURITY FREEZE UNDER THIS SECTION; AND (2) THE PROTECTED CONSUMER'S REPRESENTATIVE (I) SUBMITS THE REQUEST TO THE CONSUMER CREDIT REPORTING AGENCY AT THE ADDRESS OR OTHER POINT OF CONTACT AND IN THE MANNER SPECIFIED BY THE CONSUMER CREDIT REPORTING AGENCY; (II) PROVIDES TO THE CONSUMER CREDIT REPORTING AGENCY SUFFICIENT PROOF OF IDENTIFICATION OF THE PROTECTED CONSUMER AND THE REPRESEN- TATIVE; (III) PROVIDES TO THE CONSUMER CREDIT REPORTING AGENCY SUFFI- CIENT PROOF OF AUTHORITY TO ACT ON BEHALF OF THE PROTECTED CONSUMER; AND (IV) PAYS TO THE CONSUMER CREDIT REPORTING AGENCY A FEE, IF ANY, AS PROVIDED IN THIS SECTION. (B) IF A CONSUMER CREDIT REPORTING AGENCY DOES NOT HAVE A FILE PERTAINING TO A PROTECTED CONSUMER WHEN THE CONSUMER CREDIT REPORTING AGENCY RECEIVES A REQUEST UNDER SUBDIVISION (A) OF THIS SECTION, THE CONSUMER CREDIT REPORTING AGENCY SHALL CREATE A RECORD FOR THE PROTECTED CONSUMER. (C) WITHIN THIRTY DAYS AFTER RECEIVING A REQUEST THAT MEETS THE REQUIREMENTS OF PARAGRAPH TWO OF SUBDIVISION (A) OF THIS SECTION, A CONSUMER CREDIT REPORTING AGENCY SHALL PLACE A SECURITY FREEZE FOR THE PROTECTED CONSUMER ON THE RECORD CREATED FOR THE PROTECTED CONSUMER OR ON THE FILE PERTAINING TO THE PROTECTED CONSUMER IN THE EVENT THAT THE CONSUMER REPORTING AGENCY ALREADY HAS A FILE PERTAINING TO THE PROTECTED CONSUMER. (D) UNLESS A SECURITY FREEZE FOR A PROTECTED PERSON IS REMOVED IN ACCORDANCE WITH THIS SECTION, A CONSUMER CREDIT REPORTING AGENCY MAY NOT RELEASE THE PROTECTED CONSUMER'S CONSUMER CREDIT REPORT, ANY INFORMATION
DERIVED FROM THE PROTECTED CONSUMER'S CONSUMER REPORT, OR ANY RECORD CREATED FOR THE PROTECTED CONSUMER. (E) A SECURITY FREEZE FOR A PROTECTED CONSUMER PLACED UNDER THIS SECTION SHALL REMAIN IN EFFECT UNTIL: (1) THE PROTECTED CONSUMER OR THE PROTECTED CONSUMER'S REPRESENTATIVE REQUESTS THE CONSUMER CREDIT REPORTING AGENCY TO REMOVE THE SECURITY FREEZE FOR A PROTECTED PERSON IN ACCORDANCE WITH SUBDIVISION (F) OF THIS SECTION; OR (2) THE SECURITY FREEZE IS REMOVED IN ACCORDANCE WITH SUBDIVISION (I) OF THIS SECTION. (F) IF A PROTECTED CONSUMER OR A PROTECTED CONSUMER'S REPRESENTATIVE WISHES TO REMOVE A SECURITY FREEZE FOR THE PROTECTED CONSUMER, THE PROTECTED CONSUMER OR THE PROTECTED CONSUMER'S REPRESENTATIVE SHALL: (1) SUBMIT A REQUEST FOR THE REMOVAL OF THE SECURITY FREEZE TO THE CONSUMER CREDIT REPORTING AGENCY AT THE ADDRESS OR OTHER POINT OF CONTACT AND IN THE MANNER SPECIFIED BY THE CONSUMER CREDIT REPORTING AGENCY; (2) PROVIDE TO THE CONSUMER CREDIT REPORTING AGENCY: (I) IN THE CASE OF A REQUEST BY THE PROTECTED CONSUMER: (A) PROOF THAT THE SUFFICIENT PROOF OF AUTHORITY FOR THE PROTECTED CONSUMER'S REPRESENTATIVE TO ACT ON BEHALF OF THE PROTECTED CONSUMER IS NO LONGER VALID OR THAT THE PROTECTED CONSUMER HAS ATTAINED THE AGE OF SIXTEEN; AND (B) SUFFICIENT PROOF OF IDENTIFICATION OF THE PROTECTED CONSUMER; OR (II) IN THE CASE OF A REQUEST BY THE REPRESENTATIVE OF A PROTECTED CONSUMER: (A) SUFFI- CIENT PROOF OF IDENTIFICATION OF THE PROTECTED CONSUMER AND THE REPRE- SENTATIVE; AND (B) SUFFICIENT PROOF OF AUTHORITY TO ACT ON BEHALF OF THE PROTECTED CONSUMER; AND (C) PAY TO THE CONSUMER CREDIT REPORTING AGENCY A FEE, IF ANY, AS PROVIDED IN SUBDIVISION (H) OF THIS SECTION. (G) WITHIN THIRTY DAYS AFTER RECEIVING A REQUEST THAT MEETS THE REQUIREMENTS OF SUBDIVISION (F) OF THIS SECTION, THE CONSUMER CREDIT REPORTING AGENCY SHALL REMOVE THE SECURITY FREEZE FOR THE PROTECTED CONSUMER. (H)(1) A CONSUMER CREDIT REPORTING AGENCY MAY CHARGE A REASONABLE FEE, NOT EXCEEDING FIFTEEN DOLLARS, FOR EACH PLACEMENT OR REMOVAL OF A SECU- RITY FREEZE FOR A PROTECTED CONSUMER AS PROVIDED FOR IN SUBPARAGRAPH (IV) OF PARAGRAPH TWO OF SUBDIVISION (A) OR CLAUSE (C) OF SUBPARAGRAPH (II) OF PARAGRAPH TWO OF SUBDIVISION (F) OF THIS SECTION. A CONSUMER CREDIT REPORTING AGENCY SHALL NOT CHARGE A FEE FOR ANY OTHER SERVICE PERFORMED UNDER THIS SECTION. (2) NOTWITHSTANDING PARAGRAPH ONE OF THIS SUBDIVISION, A CONSUMER CREDIT REPORTING AGENCY MAY NOT CHARGE ANY FEE UNDER THIS SECTION IF; (I) THE PROTECTED CONSUMER'S REPRESENTATIVE: (A) HAS OBTAINED A REPORT OF ALLEGED IDENTITY THEFT OR FRAUD AGAINST THE PROTECTED CONSUMER; AND (B) PROVIDES A COPY OF THE REPORT TO THE CONSUMER CREDIT REPORTING AGEN- CY; OR (II) THE CONSUMER CREDIT REPORTING AGENCY HAS A CONSUMER CREDIT REPORT PERTAINING TO THE PROTECTED CONSUMER. (I) A CONSUMER CREDIT REPORTING AGENCY SHALL REMOVE A SECURITY FREEZE FOR A PROTECTED CONSUMER, OR DELETE A RECORD OF A PROTECTED CONSUMER, IF THE SECURITY FREEZE WAS PLACED OR THE RECORD WAS CREATED BASED ON A MATERIAL MISREPRESENTATION OF FACT BY THE PROTECTED CONSUMER OR THE PROTECTED CONSUMER'S REPRESENTATIVE. (J) THIS SECTION DOES NOT APPLY TO: (1) A PERSON ADMINISTERING A CREDIT FILE MONITORING SUBSCRIPTION SERVICE TO WHICH: (I) THE PROTECTED CONSUMER HAS SUBSCRIBED; OR (II) THE REPRESENTATIVE OF THE PROTECTED CONSUMER HAS SUBSCRIBED ON BEHALF OF THE PROTECTED CONSUMER;
(2) A PERSON PROVIDING THE PROTECTED CONSUMER OR THE PROTECTED CONSUM- ER'S REPRESENTATIVE WITH A COPY OF THE PROTECTED CONSUMER'S CONSUMER CREDIT REPORT UPON THE REQUEST OF THE PROTECTED CONSUMER OR THE PROTECTED CONSUMER'S REPRESENTATIVE; (3)(I) AN ENTITY LISTED IN PARAGRAPHS THREE THROUGH EIGHT OF SUBDIVI- SION (M) OF SECTION THREE HUNDRED EIGHTY-T OF THIS ARTICLE; (II) AN ENTITY LISTED IN SUBDIVISION (P) OF SECTION THREE HUNDRED EIGHTY-T OF THIS ARTICLE; OR (III) A CONSUMER CREDIT REPORTING AGENCY'S DATABASE OR FILE THAT CONSISTS OF INFORMATION CONCERNING, AND USED FOR, ONE OR MORE OF THE FOLLOWING: CRIMINAL RECORD INFORMATION, FRAUD PREVENTION OR DETECTION, PERSONAL LOSS HISTORY INFORMATION, AND EMPLOYMENT, TENANT, OR BACKGROUND SCREENING. (K) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE EXCLUSIVE REMEDY FOR A VIOLATION OF THIS SECTION SHALL BE IN AN ACTION COMMENCED BY THE ATTORNEY GENERAL. S 3. This act shall take effect January 1, 2015.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Discuss!

blog comments powered by Disqus