SENATE BILL No. 377

 

 

April 13, 2005, Introduced by Senators JACOBS, LELAND, CLARK-COLEMAN, BASHAM, SCHAUER and PRUSI and referred to the Committee on Banking and Financial Institutions.

 

 

 

 

     A bill to require certain credit reporting agencies to place

 

security alerts and security freezes on certain consumer credit

 

information; to authorize and limit fees; and to provide remedies.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1. This act shall be known and may be cited as the

 

"credit security act of 2005".

 

     Sec. 3. As used in this act:

 

     (a) "Clear and proper identification" means information

 

generally deemed sufficient to identify an individual.

 

     (b) "Consumer" means an individual who resides in this state.

 

     (c) "Consumer file" means any file or record maintained by a

 

credit reporting agency about a consumer.

 

     (d) "Credit report" means any written, oral, or other

 

communication of any credit information by a credit reporting


 

agency that operates or maintains a database of consumer credit

 

information bearing on a consumer's creditworthiness, credit

 

standing, or credit capacity.

 

     (e) "Credit reporting agency" means any person who, for

 

monetary fees or dues or on a cooperative nonprofit basis,

 

regularly engages in whole or in part in the practice of assembling

 

or evaluating consumer credit information or other information on

 

consumers for the purpose of furnishing consumer reports to third

 

parties and who uses any means or facility of interstate commerce

 

for the purpose of preparing or furnishing credit reports. The term

 

does not include a check acceptance service that provides check

 

approval and guarantee services to merchants.

 

     (f) "Security alert" means a notice that is placed on a

 

consumer file at the request of the consumer, is sent to a

 

recipient of a credit report involving that consumer file, and

 

states that the consumer's identity may have been used without the

 

consumer's consent to fraudulently obtain goods or services in the

 

consumer's name.

 

     (g) "Security freeze" means a notice placed on a consumer file

 

at the request of the consumer and that prohibits a credit

 

reporting agency from releasing the consumer's credit report or

 

credit score without the express authorization of the consumer

 

except in compliance with this act.

 

     Sec. 5. (1) A consumer may place a security freeze on his or

 

her consumer file by making a written request to a credit reporting

 

agency that includes clear and proper identification of the

 

consumer. A credit reporting agency shall place a security freeze


 

on a consumer's consumer file within 10 business days after

 

receiving a written request for the security freeze from the

 

consumer under this subsection.

 

     (2) If a security freeze is in place, a credit reporting

 

agency shall not release information from a consumer file to a

 

third party without prior express authorization from the consumer.

 

This subsection does not prevent a credit reporting agency from

 

advising a third party that a security freeze is in effect with

 

respect to the consumer's consumer file.

 

     Sec. 7. (1) Within 10 business days after a credit reporting

 

agency receives a request for a security freeze under section 5,

 

the credit reporting agency shall provide the consumer with a

 

unique personal identification number or password that the consumer

 

may use to provide authorization for access to his or her consumer

 

file for a specific period of time. In addition, the credit

 

reporting agency shall simultaneously provide to the consumer in

 

writing the process for placing, removing, and temporarily lifting

 

a security freeze and the process for allowing access to

 

information from the consumer file while the security freeze is in

 

effect.

 

     (2) A consumer may request in writing a replacement personal

 

identification number or password for purposes of subsection (1).

 

The request must comply with the requirements for requesting a

 

security freeze under section 5. Within 7 business days after a

 

credit reporting agency receives a request for a replacement

 

personal identification number or password, the credit reporting

 

agency shall provide the consumer with a new, unique personal


 

identification number or password to be used by the consumer

 

instead of the number or password that was provided under

 

subsection (1).

 

     Sec. 9. (1) A credit reporting agency shall notify a person

 

who requests a credit report if a security freeze is in effect for

 

the consumer file involved in that credit report.

 

     (2) If a security freeze is in effect, a credit reporting

 

agency shall not change any of the following information in a

 

consumer file without sending a written confirmation of the change

 

to the consumer within 30 days after the posting of the change to

 

the consumer's file: name, date of birth, social security number,

 

or address. If the change is an address change, the credit

 

reporting agency shall send written confirmation to both the new

 

address and the former address. Written confirmation is not

 

required for a technical modification of information in a consumer

 

file, including name and street abbreviations, complete spellings,

 

or transposition of numbers or letters.

 

     Sec. 11. (1) A credit reporting agency shall remove or

 

temporarily lift a security freeze placed on a consumer file only

 

if 1 of the following applies:

 

     (a) The consumer makes a request under this section and pays

 

any applicable fees under section 13.

 

     (b) The consumer file is frozen due to a material

 

misrepresentation of fact by the consumer. If a credit reporting

 

agency intends to remove a security freeze on a consumer file under

 

this subdivision, the credit reporting agency shall notify the

 

consumer in writing before removing the security freeze.


 

     (2) If a consumer wishes to allow access to his or her

 

consumer file for a specific period of time while a security freeze

 

is in place, he or she shall contact the credit reporting agency

 

and request that the credit reporting agency temporarily lift the

 

security freeze and provide all of the following to the credit

 

reporting agency:

 

     (a) Clear and proper identification.

 

     (b) The unique personal identification number or password

 

provided by the credit reporting agency under section 5.

 

     (c) The specific time period that the consumer requests that

 

the credit reporting agency allow users access to his or her

 

consumer file.

 

     (3) A credit reporting agency that receives a request from a

 

consumer to temporarily lift a security freeze on his or her

 

consumer file under subsection (2) shall comply with the request

 

within 3 business days after receiving the request. A credit

 

reporting agency may develop procedures involving the use of

 

telephone, facsimile, the internet, or other electronic media to

 

receive and process a request from a consumer to temporarily lift a

 

security freeze on a consumer file in an expedited manner.

 

     (4) A security freeze shall remain in place until the consumer

 

requests that the credit reporting agency remove the security

 

freeze. A credit reporting agency shall remove a security freeze

 

within 3 business days after receiving a request for removal from

 

the consumer and the all of the following information from the

 

consumer:

 

     (a) Clear and proper identification.


 

     (b) The unique personal identification number or password

 

provided by the credit reporting agency under section 7.

 

     Sec. 13. (1) A credit reporting agency may impose a reasonable

 

fee on a consumer for initially placing a security freeze on a

 

consumer file. The amount of the fee may not exceed $10.00.

 

     (2) A credit reporting agency may impose a reasonable fee on a

 

consumer to temporarily lift a security freeze on a consumer file.

 

The amount of the fee may not exceed $8.00 per request.

 

     (3) A credit reporting agency may not charge a consumer a fee

 

for revoking a security freeze.

 

     Sec. 15. A consumer damaged by an intentional or negligent

 

violation of this act may bring an action for and is entitled to

 

recover his or her actual damages, plus reasonable attorney fees

 

and court costs.