senate Bill S6682

Amended

Relates to credit record freezes and protected minors

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

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

Summary

Relates to credit record freezes and protected minors.

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Bill Details

Versions:
S6682
S6682A
S6682B
Legislative Cycle:
2013-2014
Law Section:
General Business Law
Laws Affected:
Amd §380-a, rel §380-u to be §380-v, add §380-u, Gen Bus L

Votes

11
0
11
Aye
0
Nay
0
aye with reservations
0
absent
0
excused
0
abstained
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Sponsor Memo

BILL NUMBER:S6682

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.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6682

                            I N  S E N A T E

                            February 26, 2014
                               ___________

Introduced  by  Sens.  ZELDIN, DeFRANCISCO, MARTINS, RANZENHOFER -- read
  twice and ordered printed, and when printed to  be  committed  to  the
  Committee on Consumer Protection

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"  SHALL MEAN AN INDIVIDUAL WHO IS
UNDER THE AGE OF SIXTEEN YEARS AT THE TIME A REQUEST FOR  THE  PLACEMENT
OF A SECURITY FREEZE IS MADE.
  (P) THE TERM "RECORD" SHALL MEAN 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13240-06-4

S. 6682                             2

FROM THE PROTECTED CONSUMER'S CONSUMER CREDIT REPORT EXCEPT AS  PROVIDED
IN THIS SECTION.
  (S)(1)  THE  TERM  "SUFFICIENT PROOF OF AUTHORITY" MEANS DOCUMENTATION
THAT SHOWS A  REPRESENTATIVE  HAS  AUTHORITY  TO  ACT  ON  BEHALF  OF  A
PROTECTED CONSUMER.
  (2)  THE TERM "SUFFICIENT PROOF OF AUTHORITY" MAY INCLUDE (I) AN ORDER
ISSUED BY A COURT OF LAW; OR (II) A WRITTEN, NOTARIZED STATEMENT  SIGNED
BY A REPRESENTATIVE THAT EXPRESSLY DESCRIBES THE AUTHORITY OF THE REPRE-
SENTATIVE TO ACT ON BEHALF OF A PROTECTED CONSUMER.
  (T)(1) THE TERM "SUFFICIENT PROOF OF IDENTIFICATION" MEANS INFORMATION
OR  DOCUMENTATION  THAT  IDENTIFIES  A PROTECTED CONSUMER OR A REPRESEN-
TATIVE OF A PROTECTED CONSUMER.
  (2) THE TERM "SUFFICIENT PROOF OF IDENTIFICATION" MAY  INCLUDE  (I)  A
SOCIAL SECURITY NUMBER OR A COPY OF A SOCIAL SECURITY CARD ISSUED BY THE
SOCIAL  SECURITY  ADMINISTRATION; (II) A CERTIFIED OR OFFICIAL COPY OF A
BIRTH CERTIFICATE ISSUED BY THE ENTITY AUTHORIZED  TO  ISSUE  THE  BIRTH
CERTIFICATE;  OR  (III)  A COPY OF A DRIVER'S LICENSE, AN IDENTIFICATION
CARD ISSUED BY THE DEPARTMENT OF MOTOR VEHICLES, OR  ANY  OTHER  GOVERN-
MENT-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 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:

S. 6682                             3

  (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 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) EXCEPT AS PROVIDED IN PARAGRAPH THREE OF  THIS  SUBDIVISION,  A
CONSUMER  CREDIT  REPORTING  AGENCY MAY NOT CHARGE A FEE FOR ANY SERVICE
PERFORMED UNDER THIS SECTION.
  (2) 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.
  (3) NOTWITHSTANDING PARAGRAPH TWO  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 FRAUD AGAINST THE PROTECTED CONSUMER UNDER SECTIONS
190.77 THROUGH 190.80 OF THE PENAL LAW; AND (B) PROVIDES A COPY  OF  THE
REPORT  TO  THE  CONSUMER CREDIT REPORTING AGENCY; OR (II) (A) A REQUEST
FOR THE PLACEMENT OR REMOVAL OF A SECURITY FREEZE  IS  FOR  A  PROTECTED
CONSUMER  WHO  IS  UNDER  THE  AGE  OF  SIXTEEN YEARS AT THE TIME OF THE
REQUEST; AND (B) 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;

S. 6682                             4

  (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.

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