Connecticut Seal

General Assembly

 

Raised Bill No. 950

January Session, 2005

 

LCO No. 2965

 

*02965_______GL_*

Referred to Committee on General Law

 

Introduced by:

 

(GL)

 

AN ACT CONCERNING PROTECTION AGAINST IDENTITY THEFT.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective July 1, 2005) As used in sections 1 to 3, inclusive, of this act:

(1) "Consumer" means consumer as defined in section 36a-695 of the general statutes;

(2) "Credit report" means credit report as defined in section 36a-695 of the general statutes; and

(3) "Credit rating agency" means credit rating agency as defined in section 36a-695 of the general statutes.

Sec. 2. (NEW) (Effective July 1, 2005) (a) Any consumer may request that a credit reporting agency establish a security freeze on the consumer's account under which such agency shall refrain from releasing all or any part of such consumer's credit report or any information derived from such report without the express authorization of the consumer to any person, except: (1) A person or such person's subsidiary, affiliate, agent or assignee with which the consumer has or, prior to assignment, had an account, contract or debtor-creditor relationship for the purposes of reviewing the account or collecting the financial obligation owing for the account, contract or debt; (2) a person acting pursuant to a court order, warrant or subpoena; (3) a state or municipal agency for the purposes of collecting taxes, collecting child support or investigating fraud or any other violation of the law; and (4) any person for the purposes of: (A) Prescreening, as defined in 15 USC 1681 et seq.; (B) administering a credit file monitoring service to which the consumer has subscribed, (C) providing the consumer with a copy of such consumer's credit report upon the consumer's request, or (D) subsection (f) of section 36a-699f of the general statutes.

(b) Any consumer may file a request pursuant to subsection (a) of this section, in writing by certified mail, or through a secure electronic mail connection provided by such credit reporting agency. Any credit reporting agency shall implement such security freeze request not later than thirty days after receipt of such security freeze request and provide notification to the consumer of the implementation of such request not later than three business days after such implementation.

(c) After implementation of any such security freeze, a consumer may authorize any person to receive credit report information concerning such consumer by filing a request, in writing by certified mail, or through a secure electronic mail connection provided by such credit rating agency. Such request shall include the consumer's proper identification, unique personal identification number or password provided by such credit rating agency, identifying information concerning the recipient of the credit report information and such other information as the credit reporting agency may request for security purposes. Upon receipt of such request, such credit rating agency shall implement such request not later than three business days after receiving such request.

(d) Any credit rating agency may decline to implement or may rescind such security freeze request if such agency believes, in good faith, that such request was made as part of a fraud that the consumer participated in, had knowledge of or can be demonstrated by circumstantial evidence. In the event any such credit rating agency declines to implement or rescinds a security freeze, such credit rating agency shall promptly notify such consumer not later than five days after such refusal.

(e) During any such security freeze, a credit rating agency shall, not later than three business days after such attempt, report to such consumer any attempt that is made to access a credit report of such consumer by a third party for the sole purpose of receiving, extending or otherwise utilizing the credit therein.

(f) No credit rating agency shall state or imply to a third party that such consumer's security freeze is the result of a negative credit score, history, report or rating.

(g) No credit rating agency shall charge a fee for implementation of a security freeze pursuant to subsection (a) of this section or an authorization for disclosure pursuant to subsection (c) of this section.

(h) Any violation of this section shall constitute an unfair insurance practice.

Sec. 3. (NEW) (Effective July 1, 2005) Notwithstanding any provision of the general statutes, any time a consumer is required to receive a summary of rights required under the federal Fair Credit Report Act, such consumer shall also receive a notice substantially similar to the following:

"Connecticut Consumers Have the Right to Obtain a Security Freeze

You may obtain a security freeze on your credit report at no charge to protect your privacy and ensure that credit is not granted in your name without your knowledge. You have a right to place a "security freeze" on your credit report.

The security freeze will prohibit a credit rating agency from releasing any information in your credit report without your express authorization or approval.

The security freeze is designed to prevent credit, loans and services from being approved in your name without your consent. When you place a security freeze on your credit report, within thirty days you will be provided a personal identification number or password to use if you choose to remove the freeze on your credit report or to temporarily authorize the release of your credit report to a specific party or parties after the freeze is in place. To provide that authorization, you must contact the credit rating agency and provide proper identification, a unique personal identification number or password provided by the credit rating agency, identifying information concerning the recipient of the credit report information and such other information as the credit reporting agency may request for security purposes.

A credit rating agency that receives a request from a consumer to lift temporarily a freeze on a credit report shall comply with such request within three business days after receiving the request.

A security freeze does not apply to circumstances where you have an existing account relationship and a copy of your report is requested by your existing creditor or its agents or affiliates for certain types of account review, collection, fraud control or similar activities.

If you are actively seeking credit, you should understand that the procedures involved in lifting a security freeze may slow your own applications for credit. You should plan ahead and lift a freeze – either completely if you are shopping around or specifically for a certain creditor – a few days before actually applying for such credit.

You have a right to bring a civil action against someone who violates your rights under credit reporting laws. The action can be brought against a credit rating agency or a user of your credit report."

Sec. 4. Section 36a-699 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2005):

Any person who wilfully violates any provision of sections 36a-695 to 36a-699, inclusive, section 2 of this act or section 36a-699f shall be fined not more than one hundred dollars for a first offense and not more than five hundred dollars for a second offense, and shall be fined not more than one thousand dollars or be imprisoned for not more than six months, or both, for each subsequent offense.

Sec. 5. Section 36a-696 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2005):

(a) No creditor shall take adverse action based wholly or in part on a credit report on any consumer applying to such creditor for credit for personal, family or household purposes without first disclosing to the consumer the name and address of the credit rating agency which issued the report.

(b) Upon written request and proper identification of any consumer, a credit rating agency shall disclose to the consumer, within five business days of receipt of the consumer's request, the nature and substance of all information in its files, including (1) any credit score or predictor relating to the consumer, as required by and in a form and manner that complies with the federal Fair Credit Reporting Act and commentary adopted and enforced by the Federal Trade Commission; (2) a record of all inquiries, by recipient, including the recipient's name which resulted in providing a credit report concerning the consumer during the preceding twelve-month period; (3) a clear and concise explanation of the information; and (4) a written summary of the consumer's rights under state and federal consumer credit reporting statutes in a form substantially similar to the summary in section 36a-699a. The credit rating agency [may] shall not charge [no more than five dollars] any fee for the first request for such information within the preceding twelve months and no more than [seven] five dollars [and fifty cents] for any additional request within the same twelve-month period for such information, provided such disclosure shall be made without charge to the consumer if the request for disclosure is made not more than sixty days after notification to the consumer of an adverse action by a creditor.

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2005

New section

Sec. 2

July 1, 2005

New section

Sec. 3

July 1, 2005

New section

Sec. 4

July 1, 2005

36a-699

Sec. 5

July 1, 2005

36a-696

Statement of Purpose:

To provide consumers with the ability to place a security freeze on the issuance of their credit reports in order to prevent against identity theft.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]