Senate Bill sb0656c1

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    Florida Senate - 2006                            CS for SB 656

    By the Committee on Commerce and Consumer Services; and
    Senators Peaden, Haridopolos, Jones, Fasano, Baker and Crist




    577-1885-06

  1                      A bill to be entitled

  2         An act relating to security of consumer report

  3         information; creating s. 501.005, F.S.;

  4         defining the term "security freeze";

  5         authorizing a consumer to place a security

  6         freeze on his or her consumer report; providing

  7         procedures and requirements with respect to the

  8         placement, temporary suspension, and removal of

  9         a security freeze on a consumer report;

10         authorizing a consumer to allow specified

11         temporary access to his or her consumer report

12         during a security freeze; providing procedures

13         with respect to such temporary access;

14         providing for removal of a security freeze when

15         a consumer report is frozen due to a material

16         misrepresentation of fact by the consumer;

17         providing applicability; prohibiting a consumer

18         reporting agency from charging a fee to a

19         victim of identity theft who requests a

20         security freeze on a consumer report;

21         authorizing consumer reporting agencies to

22         charge a fee to place, remove, or temporarily

23         lift a security freeze and to reissue a

24         personal identification number; restricting the

25         change of specified information in a consumer

26         report when a security freeze is in effect;

27         specifying applicability with respect to

28         certain consumer reporting agencies; specifying

29         entities that are exempt from placing a

30         security freeze on a consumer report; providing

31         for a civil remedy; providing requirements with

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    Florida Senate - 2006                            CS for SB 656
    577-1885-06




 1         respect to written disclosure by a consumer

 2         reporting agency of procedures and consumer

 3         rights associated with a security freeze;

 4         providing an effective date.

 5  

 6  Be It Enacted by the Legislature of the State of Florida:

 7  

 8         Section 1.  Section 501.005, Florida Statutes, is

 9  created to read:

10         501.005  Consumer report security freeze.--

11         (1)  For purposes of this section, a "security freeze"

12  means a notice placed in a consumer report which prohibits a

13  consumer reporting agency, as defined in 15 U.S.C. s.

14  1681a(f), from releasing the consumer report, credit score, or

15  any information relating to the extension of credit which is

16  contained within the consumer report to a third party without

17  the express authorization of the consumer. This section does

18  not prevent a consumer reporting agency from advising a third

19  party that a security freeze is in effect with respect to the

20  consumer report. For purposes of this part, the term "consumer

21  report" has the same meaning set forth in 15 U.S.C. s.

22  1681a(d).

23         (2)  A consumer may place a security freeze on his or

24  her consumer report by:

25         1.  Making a request in writing by certified mail to a

26  consumer reporting agency;

27         2.  Including information that properly identifies the

28  consumer; and

29         3.  Paying a fee authorized under this section.

30  

31  

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    Florida Senate - 2006                            CS for SB 656
    577-1885-06




 1         (3)  A consumer reporting agency shall place a security

 2  freeze on a consumer report no later than 5 business days

 3  after receiving a request from the consumer.

 4         (4)  The consumer reporting agency shall send a written

 5  confirmation of the security freeze to the consumer within 10

 6  business days after instituting the security freeze and shall

 7  provide the consumer with a unique personal identification

 8  number or password to be used by the consumer when providing

 9  authorization for the removal of a security freeze on his or

10  her consumer report pursuant to subsection (5) or subsection

11  (11).

12         (5)  A consumer may allow his or her consumer report to

13  be accessed for a designated period of time while a security

14  freeze is in effect by contacting the consumer reporting

15  agency and requesting that the freeze be temporarily lifted.

16  The consumer must provide the following information to the

17  consumer reporting agency as part of the request:

18         (a)  Proper identification as determined by the

19  consumer reporting agency.

20         (b)  The unique personal identification number or

21  password provided by the consumer reporting agency pursuant to

22  subsection (4).

23         (c)  Information specifying the period of time for

24  which the report shall be made available.

25         (d)  Payment of a fee authorized by this section.

26         (6)  A consumer reporting agency that receives a

27  request from a consumer to temporarily lift a freeze on a

28  consumer report pursuant to subsection (5) shall comply with

29  the request no later than 3 business days after receiving the

30  request.

31  

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    Florida Senate - 2006                            CS for SB 656
    577-1885-06




 1         (7)  A consumer reporting agency doing business in this

 2  state shall develop telephonic communication or any form of

 3  secure electronic media to receive and process a request from

 4  a consumer pursuant to subsection (5).

 5         (8)  A consumer reporting agency shall temporarily lift

 6  or remove a security freeze placed on a consumer report only

 7  in the following instances:

 8         (a)  Upon consumer request, pursuant to subsection (5)

 9  or subsection (11).

10         (b)  If the consumer report was frozen due to a

11  material misrepresentation of fact by the consumer. If a

12  consumer reporting agency intends to remove a security freeze

13  on a consumer report pursuant to this paragraph, the consumer

14  reporting agency shall notify the consumer in writing prior to

15  removing the security freeze.

16         (9)  A third party requesting access to a consumer

17  report on which a security freeze is in effect in connection

18  with an application for credit or other permissible use may

19  treat the application as incomplete if the consumer has not

20  authorized a temporary lifting of the security freeze for the

21  period of time during which the request is made.

22         (10)  If a consumer requests a security freeze, the

23  consumer reporting agency shall disclose to the consumer all

24  information relevant to the process of instituting,

25  temporarily lifting, and removing a security freeze and shall

26  include the disclosure required by subsection (17).

27         (11)  A security freeze shall remain in place until the

28  consumer requests that it be removed. A consumer reporting

29  agency shall remove a security freeze within 3 business days

30  after receiving a request for removal from the consumer, who,

31  

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    Florida Senate - 2006                            CS for SB 656
    577-1885-06




 1  upon making the request for removal, must provide the

 2  following:

 3         (a)  Proper identification as determined by the

 4  consumer reporting agency.

 5         (b)  The unique personal identification number or

 6  password provided by the consumer reporting agency pursuant to

 7  subsection (4).

 8         (c)  Payment of a fee authorized under this section.

 9         (12)  The provisions of this section do not apply to

10  the use of a consumer report by the following persons or for

11  the following reasons:

12         (a)  A person to whom the consumer owes a financial

13  obligation or a subsidiary, affiliate, or agent of the person,

14  or an assignee of a financial obligation owed by the consumer

15  to the person, or a prospective assignee of a financial

16  obligation owed by the consumer to the person in conjunction

17  with the proposed purchase of the financial obligation, with

18  which the consumer has or had prior to assignment an account

19  or contract, including a deposit account, or to whom the

20  consumer issued a negotiable instrument, for the purposes of

21  reviewing the account or collecting the financial obligation

22  owed for the account, contract, or negotiable instrument. For

23  purposes of this paragraph, the term "reviewing the account"

24  includes activities related to account maintenance,

25  monitoring, credit line increases, and account upgrades and

26  enhancements.

27         (b)  A subsidiary, affiliate, agent, assignee, or

28  prospective assignee of a person to whom access has been

29  granted under this section for purposes of facilitating the

30  extension of credit or other permissible use.

31  

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    Florida Senate - 2006                            CS for SB 656
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 1         (c)  A state agency acting within its lawful

 2  investigative or regulatory authority.

 3         (d)  A state or local law enforcement agency acting to

 4  investigate a crime or conducting a criminal background check.

 5         (e)  Any person administering a credit file monitoring

 6  subscription service to which the consumer has subscribed.

 7         (f)  Any person for the purpose of providing a consumer

 8  with a copy of the consumer report upon the consumer's

 9  request.

10         (g)  Pursuant to a court order lawfully entered.

11         (h)  The use of credit information for the purposes of

12  prescreening as provided for by the federal Fair Credit

13  Reporting Act.

14         (i)  Any person in connection with the underwriting of

15  insurance.

16         (13)  A consumer reporting agency shall not charge any

17  fee to a victim of identity theft who has submitted, at the

18  time the security freeze is requested, a copy of a valid

19  investigative or incident report or complaint with a law

20  enforcement agency about the unlawful use of the victim's

21  identifying information by another person. A consumer

22  reporting agency may charge a reasonable fee, not to exceed

23  $10, to a consumer who elects to place, remove, or temporarily

24  lift a security freeze on his or her consumer report. A

25  consumer may be charged a reasonable fee, not to exceed $10,

26  if the consumer fails to retain the original personal

27  identification number or password provided by the consumer

28  reporting agency, and the agency must reissue the personal

29  identification number or password or provide a new personal

30  identification number or password to the consumer.

31  

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    Florida Senate - 2006                            CS for SB 656
    577-1885-06




 1         (14)  If a security freeze is in effect, a consumer

 2  reporting agency shall not change any of the following

 3  official information in a consumer report without sending a

 4  written confirmation of the change to the consumer within 30

 5  days after the change is posted to the consumer's file:

 6         (a)  Name.

 7         (b)  Address.

 8         (c)  Date of birth.

 9         (d)  Social security number.

10  

11  Written confirmation is not required for technical corrections

12  of a consumer's official information, including name and

13  street abbreviations, complete spellings, or transposition of

14  numbers or letters. In the case of an address change, the

15  written confirmation shall be sent to both the new address and

16  the former address.

17         (15)  The provisions of this section do not apply to

18  the following entities:

19         (a)  A check services company, which issues

20  authorizations for the purpose of approving or processing

21  negotiable instruments, electronic funds transfers, or similar

22  methods of payment.

23         (b)  A deposit account information service company,

24  which issues reports regarding account closures due to fraud,

25  substantial overdrafts, automatic teller machine abuse, or

26  similar negative information regarding a consumer to inquiring

27  banks or other financial institutions for use only in

28  reviewing a consumer request for a deposit account at the

29  inquiring bank or financial institution, as defined in s.

30  655.005(1)(g) or (h), or in federal law.

31  

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    Florida Senate - 2006                            CS for SB 656
    577-1885-06




 1         (c)  A consumer reporting agency that acts only as a

 2  reseller of credit information by assembling and merging

 3  information contained in the database of another consumer

 4  reporting agency or multiple consumer reporting agencies and

 5  does not maintain a permanent database of credit information

 6  from which new consumer reports are produced. However, a

 7  consumer reporting agency shall honor any security freeze

 8  placed on a consumer report by another consumer reporting

 9  agency.

10         (d)  A fraud prevention services company issuing

11  reports to prevent or investigate fraud.

12         (16)  In addition to any other penalties or remedies

13  provided under law, a person who is aggrieved by a violation

14  of the provisions of this section may bring a civil action as

15  authorized by this subsection.

16         (a)  Any person who willfully fails to comply with any

17  requirement imposed under this section with respect to any

18  consumer is liable to that consumer for actual damages

19  sustained by the consumer as a result of the failure of not

20  less than $100 and not more than $1,000, plus the cost of the

21  action together with reasonable attorney's fees.

22         (b)  Any individual who obtains a consumer report under

23  false pretenses or knowingly without a permissible purpose is

24  liable to the consumer for actual damages sustained by the

25  consumer as a result of the failure or damages of not less

26  than $100 and not more than $1,000, whichever is greater. Any

27  person who obtains a consumer report from a consumer reporting

28  agency under false pretenses or knowingly without a

29  permissible purpose is liable to the consumer reporting agency

30  for actual damages sustained by the consumer reporting agency

31  or $1,000, whichever is greater.

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    Florida Senate - 2006                            CS for SB 656
    577-1885-06




 1         (c)  Punitive damages may be assessed for willful

 2  violations of this section.

 3         (d)  Any person who is negligent in failing to comply

 4  with any requirement imposed under this section with respect

 5  to any consumer is liable to that consumer for any actual

 6  damages sustained by the consumer as a result of the failure

 7  of not less than $100 and not more than $1,000.

 8         (e)  Upon a finding by the court that an unsuccessful

 9  pleading, motion, or other paper filed in connection with an

10  action under this subsection was filed in bad faith or for

11  purposes of harassment, the court shall award to the

12  prevailing party attorney's fees that are reasonable in

13  relation to the work performed in responding to the pleading,

14  motion, or other paper.

15         (17)  Any written disclosure by a consumer reporting

16  agency, pursuant to 15 U.S.C. s. 1681g, to any consumer

17  residing in this state shall include a written summary of all

18  rights the consumer has under this section, and, in the case

19  of a consumer reporting agency which compiles and maintains

20  consumer reports on a nationwide basis, a toll-free telephone

21  number that the consumer can use to communicate with the

22  consumer reporting agency. The information set forth in

23  paragraph (b) of the written summary of rights must be in at

24  least 14-point boldface type in capital letters. The written

25  summary of rights required under this section is sufficient if

26  it is substantially in the following form:

27         (a)  You have a right to place a "security freeze" on

28  your consumer report, which will prohibit a consumer reporting

29  agency from releasing any information in your consumer report

30  without your express authorization. A security freeze must be

31  requested in writing by certified mail to a consumer reporting

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    Florida Senate - 2006                            CS for SB 656
    577-1885-06




 1  agency. The security freeze is designed to prevent credit,

 2  loans, and services from being approved in your name without

 3  your consent.

 4         (b)  YOU SHOULD BE AWARE THAT USING A SECURITY FREEZE

 5  TO CONTROL ACCESS TO THE PERSONAL AND FINANCIAL INFORMATION IN

 6  YOUR CONSUMER REPORT MAY DELAY, INTERFERE WITH, OR PROHIBIT

 7  THE TIMELY APPROVAL OF ANY SUBSEQUENT REQUEST OR APPLICATION

 8  YOU MAKE REGARDING A NEW LOAN, CREDIT, MORTGAGE, INSURANCE,

 9  GOVERNMENT SERVICES OR PAYMENTS, RENTAL HOUSING, EMPLOYMENT,

10  INVESTMENT, LICENSE, CELLULAR PHONE, UTILITIES, DIGITAL

11  SIGNATURE, INTERNET CREDIT CARD TRANSACTION, OR OTHER

12  SERVICES, INCLUDING AN EXTENSION OF CREDIT AT POINT OF SALE.

13         (c)  When you place a security freeze on your consumer

14  report, you will be provided a personal identification number

15  or password to use if you choose to remove the freeze on your

16  consumer report or authorize the release of your consumer

17  report for a designated period of time after the security

18  freeze is in place. To provide that authorization, you must

19  contact the consumer reporting agency and provide all of the

20  following:

21         1.  The personal identification number or password.

22         2.  Proper identification to verify your identity.

23         3.  Information specifying the period of time for which

24  the report shall be made available.

25         4.  Payment of a fee authorized under this section.

26         (d)  A consumer reporting agency must authorize the

27  release of your consumer report no later than 3 business days

28  after receiving the above information.

29         (e)  A security freeze does not apply to a person or

30  entity, or its affiliates, or collection agencies acting on

31  behalf of the person or entity, with which you have an

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    Florida Senate - 2006                            CS for SB 656
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 1  existing account, which requests information in your consumer

 2  report for the purposes of reviewing or collecting the

 3  account. Reviewing the account includes activities related to

 4  account maintenance, monitoring, credit line increases, and

 5  account upgrades and enhancements.

 6         (f)  You have the right to bring a civil action against

 7  anyone, including a consumer reporting agency, who fails to

 8  comply with the provisions of s. 501.005, Florida Statutes,

 9  which governs the placing of a consumer report security freeze

10  on your consumer report.

11         Section 2.  This act shall take effect July 1, 2006.

12  

13          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
14                         Senate Bill 656

15                                 

16  This committee substitute differs from the bill as filed in
    that it:
17  
    -    Increases the time that a consumer reporting agency has
18       to provide written notice that a security freeze is in
         effect from 5 to 10 business days;
19  
    -    Conforms the definition of consumer report to that used
20       in the Fair Credit Reporting Act;

21  -    Clarifies that a consumer must provide proper
         identification of him or herself to the consumer
22       reporting agency when requesting a security freeze;

23  -    Requires that consumers must pay the authorized fee when
         requesting to start or terminate a security freeze and
24       increases that fee limit from $5 to $10;

25  -    Includes within the exemptions from the law the use of a
         consumer report by a person for the purposes of
26       underwriting insurance; and

27  -    Makes technical and clarifying changes.

28  

29  

30  

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