House File 2322 - Introduced HOUSE FILE BY DE BOEF, JACOBS, MAY, and PAULSEN Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act concerning offenses against identity by providing a 2 procedure to secure credit information and providing a 3 penalty. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5094YH 82 6 rn/rj/14 PAG LIN 1 1 Section 1. NEW SECTION. 714F.1 DEFINITIONS. 1 2 For the purposes of this chapter, unless the context 1 3 otherwise requires: 1 4 1. "Consumer" means an individual. 1 5 2. "Consumer report" means any information relating to the 1 6 creditworthiness of a consumer. 1 7 3. "Consumer reporting agency" means any person or entity 1 8 engaged in the practice of assembling or evaluating consumer 1 9 credit information for the purpose of furnishing a consumer 1 10 report to a third party. A consumer reporting agency shall 1 11 not include any of the following: 1 12 a. A check service or fraud prevention service company 1 13 that reports on incidents of fraud or issues authorizations 1 14 for the purpose of approving or processing negotiable 1 15 instruments, electronic fund transfers, or similar methods of 1 16 payment. 1 17 b. A deposit account information service company that 1 18 issues reports regarding account closures due to fraud, 1 19 overdrafts, automated teller machine abuse, or similar 1 20 negative information regarding a consumer to inquiring 1 21 financial institutions for use only in reviewing the 1 22 consumer's request for a deposit account at the inquiring 1 23 financial institution. 1 24 c. Any person or entity engaged in the practice of 1 25 assembling and merging information contained in a database of 1 26 one or more consumer reporting agencies and does not maintain 1 27 a permanent database of credit information from which new 1 28 consumer reports are produced. 1 29 4. "Identification information" means as defined in 1 30 section 715A.8. 1 31 5. "Identity theft" means as used in section 715A.8. 1 32 6. "Proper identification" means sufficient identification 1 33 information to ascertain that individual's identity. 1 34 7. "Security freeze" means a hold placed on a consumer 1 35 report that prevents a consumer reporting agency from 2 1 releasing a consumer report without first obtaining the 2 2 consumer's express authorization. 2 3 Sec. 2. NEW SECTION. 714F.2 SECURITY FREEZE. 2 4 A consumer may submit by certified mail to a consumer 2 5 reporting agency a written request for a security freeze. The 2 6 consumer must submit proper identification with the request. 2 7 Within five business days after receiving the request, the 2 8 consumer reporting agency shall commence the security freeze. 2 9 Within ten business days after commencing the security freeze, 2 10 the consumer reporting agency shall send a written 2 11 confirmation to the consumer of the security freeze, a 2 12 personal identification number or password, other than the 2 13 consumer's social security number, for the consumer to use in 2 14 authorizing the suspension or removal of the security freeze, 2 15 including information on how the security freeze may be 2 16 temporarily suspended. 2 17 Sec. 3. NEW SECTION. 714F.3 TEMPORARY SUSPENSION. 2 18 A consumer may request that a security freeze be 2 19 temporarily suspended to allow the consumer reporting agency 2 20 to release the consumer report for a specific time period or 2 21 to a specific third party. The consumer reporting agency may 2 22 develop procedures to expedite the receipt and processing of 2 23 requests which may involve the use of telephones, facsimile 2 24 transmissions, the internet, or other electronic media. The 2 25 consumer reporting agency shall comply with the request within 2 26 three business days after receiving the request. The 2 27 consumer's request shall include all of the following: 2 28 1. Proper identification. 2 29 2. The personal identification number or password provided 2 30 by the consumer reporting agency. 2 31 3. Explicit instructions of the specific time period or 2 32 specific third party designated for suspension of the security 2 33 freeze. 2 34 Sec. 4. NEW SECTION. 714F.4 REMOVAL. 2 35 A security freeze remains in effect until the consumer 3 1 requests that the security freeze be removed. A consumer 3 2 reporting agency shall remove a security freeze within three 3 3 business days after receiving a request for removal that 3 4 includes proper identification of the consumer and the 3 5 personal identification number or password provided by the 3 6 consumer reporting agency. 3 7 Sec. 5. NEW SECTION. 714F.5 FEES. 3 8 1. A consumer reporting agency shall not charge any fee to 3 9 a consumer who is the victim of identity theft for 3 10 effectuating a security freeze, temporary suspension, or 3 11 removal if with the initial security freeze request, the 3 12 consumer submits a valid copy of the police report, 3 13 investigative report, or complaint filed with a law 3 14 enforcement agency concerning the unlawful use of 3 15 identification information by another person. 3 16 2. A consumer reporting agency may charge a reasonable fee 3 17 in an amount established by the superintendent of banking by 3 18 rule to a consumer who is not the victim of identity theft for 3 19 each security freeze or removal, or for reissuing a personal 3 20 identification number or password if the consumer fails to 3 21 retain the original number. The consumer reporting agency may 3 22 also charge a reasonable fee in an amount established by the 3 23 superintendent of banking by rule for each temporary 3 24 suspension of a security freeze. 3 25 Sec. 6. NEW SECTION. 714F.6 THIRD PARTIES. 3 26 If a third party requests a consumer report that is subject 3 27 to a security freeze, the consumer reporting agency may advise 3 28 the third party that a security freeze is in effect. If the 3 29 consumer does not expressly authorize the third party to have 3 30 access to the consumer report through a temporary suspension 3 31 of the security freeze, the third party shall not be given 3 32 access to the consumer report but may treat a credit 3 33 application as incomplete. 3 34 Sec. 7. NEW SECTION. 714F.7 MISREPRESENTATION OF FACT. 3 35 A consumer reporting agency may suspend or remove a 4 1 security freeze upon a material misrepresentation of fact by 4 2 the consumer. However, the consumer reporting agency shall 4 3 notify the consumer in writing prior to suspending or removing 4 4 the security freeze. 4 5 Sec. 8. NEW SECTION. 714F.8 EXCEPTIONS. 4 6 A security freeze shall not apply to the following persons 4 7 or entities: 4 8 1. A person or person's subsidiary, affiliate, agent, or 4 9 assignee with which the consumer has or prior to assignment 4 10 had an account, contract, or debtor=creditor relationship for 4 11 the purposes of reviewing the account or collecting the 4 12 financial obligation owing for the account, contract, or debt, 4 13 or extending credit to a consumer with a prior or existing 4 14 account, contract, or debtor=creditor relationship. 4 15 "Reviewing the account" includes activities related to account 4 16 maintenance, monitoring, credit line increases, and account 4 17 upgrades and enhancements. 4 18 2. A subsidiary, affiliate, agent, assignee, or 4 19 prospective assignee of a person to whom access has been 4 20 granted under a temporary suspension for purposes of 4 21 facilitating the extension of credit or another permissible 4 22 use. 4 23 3. A person acting pursuant to a court order, warrant, or 4 24 subpoena. 4 25 4. Child support enforcement officials when investigating 4 26 a child support case pursuant to Title IV=D or Title XIX of 4 27 the federal Social Security Act. 4 28 5. The department of human services or its agents or 4 29 assignees acting to investigate fraud under the medical 4 30 assistance program. 4 31 6. The department of revenue or local taxing authorities; 4 32 or any of their agents or assignees, acting to investigate or 4 33 collect delinquent taxes or assessments, including interest 4 34 and penalties and unpaid court orders, or to fulfill any of 4 35 their other statutory or other responsibilities. 5 1 7. A person's use of credit information for prescreening 5 2 as provided by the federal Fair Credit Reporting Act. 5 3 8. A person for the sole purpose of providing a credit 5 4 file monitoring subscription service to which the consumer has 5 5 subscribed. 5 6 9. A consumer reporting agency for the sole purpose of 5 7 providing a consumer with a copy of the consumer's consumer 5 8 report upon the consumer's request. 5 9 Sec. 9. NEW SECTION. 714F.9 WRITTEN CONFIRMATION. 5 10 After a security freeze is in effect, a consumer reporting 5 11 agency may post a name, date of birth, social security number, 5 12 or address change in a consumer report provided written 5 13 confirmation is sent to the consumer within thirty days of 5 14 posting the change. For an address change, written 5 15 confirmation shall be sent to both the new and former 5 16 addresses. Written confirmation is not required to correct 5 17 spelling and typographical errors. 5 18 Sec. 10. NEW SECTION. 714F.10 APPLICATION. 5 19 An entity listed in section 714F.1, subsection 3, paragraph 5 20 "a", "b", or "c", shall be subject to a security freeze 5 21 commenced by a consumer reporting agency that obtains 5 22 information from such entity. 5 23 Sec. 11. NEW SECTION. 714F.11 WAIVER VOID. 5 24 A waiver by a consumer of the provisions of this chapter is 5 25 contrary to public policy, and is void and unenforceable. 5 26 Sec. 12. NEW SECTION. 714F.12 ENFORCEMENT. 5 27 A person who violates this chapter violates section 714.16, 5 28 subsection 2, paragraph "a". 5 29 EXPLANATION 5 30 This bill concerns the protection of a person's identity. 5 31 The bill creates new Code chapter 714F that allows an 5 32 individual, the consumer, to place a hold on the individual's 5 33 consumer report to prevent a consumer reporting agency from 5 34 releasing any information relating to the individual's 5 35 creditworthiness without first obtaining the individual's 6 1 express authorization. This "security freeze" may be 6 2 temporarily suspended to allow a consumer reporting agency to 6 3 release a consumer report for a specific time period or to a 6 4 specific third party. A security freeze remains in effect 6 5 until the individual requests its removal. 6 6 The bill provides that a consumer reporting agency cannot 6 7 charge any fees to an individual who is the victim of identify 6 8 theft. Other individuals may be required to pay a reasonable 6 9 fee per security freeze or removal, or for reissuing a 6 10 necessary identification number or password if the individual 6 11 fails to retain it, and per temporary suspension request, in 6 12 an amount determined by the superintendent of banking by rule. 6 13 The bill addresses third parties that seek a consumer 6 14 report, misrepresentation of a material fact by an individual, 6 15 and lists exceptions to the security freeze, including a 6 16 person with a prior debtor=creditor relationship. The bill 6 17 provides for changes in the consumer report and makes certain 6 18 entities also subject to a security freeze. 6 19 The bill provides that a waiver of the protection offered 6 20 by the security freeze provision is void and unenforceable. 6 21 The bill contains an enforcement provision. A violation is 6 22 an offense under Code section 714.16, and as such would be 6 23 subject to enforcement, including injunctive relief and money 6 24 damages, by the attorney general. 6 25 LSB 5094YH 82 6 26 rn/rj/14