HF 836

as introduced - 88th Legislature (2013 - 2014) Posted on 02/22/2013 01:54pm

A bill for an act
relating to consumer protection; authorizing certain representatives of protected
consumers to lift or remove credit freezes; amending Minnesota Statutes 2012,
section 13C.016.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2012, section 13C.016, is amended to read:

13C.016 CONSUMER SECURITY FREEZE.

Subdivision 1.

Definitions.

(a) For purposes of this section and sections 13C.017 to
13C.019, the terms defined in this section have the meanings given.

new text begin (b) "Protected consumer" means an individual who is:
new text end

new text begin (1) not older than 16 years old at the time a representative requests a security freeze
on the individual's behalf; or
new text end

new text begin (2) incapacitated or for whom a court or other authority has appointed a guardian
or conservator.
new text end

new text begin (c) "Representative" means a consumer who provides a consumer reporting agency
with sufficient proof of the consumer's authority to act on a protected consumer's behalf.
new text end

deleted text begin (b) deleted text end new text begin (d) new text end "Security freeze" means a notice placed in a consumer's consumer report,
at the request of the consumer new text begin or representative new text end and subject to certain exceptions, that
prohibits the consumer reporting agency from releasing the consumer report or any
information from it, in connection with the extension of credit or the opening of a new
account, without the express authorization of the consumer new text begin or representative new text end . If a security
freeze is in place, information from a consumer's consumer report may not be released
to a third party, in connection with the extension of credit or the opening of an account,
without prior express authorization from the consumer new text begin or representative new text end . This paragraph
does not prevent a consumer reporting agency from advising a third party that a security
freeze is in effect with respect to the consumer report.

deleted text begin (c) deleted text end new text begin (e) new text end "Victim of identity theft" means a consumer who has a copy of a valid police
report evidencing that the consumer has alleged to be a victim of identity theft as defined
in section 609.527.

Subd. 2.

Right to obtain security freeze.

A consumer new text begin or representative new text end may elect
to place a security freeze on the consumer's consumer report by making a request to a
consumer reporting agency. The consumer new text begin or representative new text end may make the request:

(1) by certified mail;

(2) by telephone by providing certain personal identification required by the
consumer reporting agency; or

(3) directly to the consumer reporting agency through a secure electronic mail
connection if the connection is made available by the consumer reporting agency.

new text begin Subd. 2a. new text end

new text begin Proof of representative's authority to act. new text end

new text begin A representative who
seeks to place a security freeze on a protected consumer's consumer report shall provide
sufficient proof of the representative's authority to act on the protected consumer's behalf.
Sufficient proof of authority consists of:
new text end

new text begin (1) a court order that identifies or describes the relationship between the
representative and the protected consumer;
new text end

new text begin (2) a valid and lawfully executed power of attorney that permits the representative to
act on the protected consumer's behalf; or
new text end

new text begin (3) a written affidavit that the representative signs and has notarized in which the
representative expressly describes the relationship between the representative and the
protected consumer and the representative's authority to act on the protected consumer's
behalf.
new text end

Subd. 3.

Response of consumer reporting agency.

(a) A consumer reporting agency
shall place a security freeze on a consumer's consumer report no later than three business
days after receiving a request under subdivision 2 from the consumer new text begin or representative new text end .

(b) The consumer reporting agency, within ten business days after receiving the
request, shall send a written confirmation of the security freeze to the deleted text begin consumer deleted text end new text begin requester
new text end and provide the deleted text begin consumer deleted text end new text begin requester new text end with a unique personal identification number or
password to be used by the deleted text begin consumer deleted text end new text begin requester new text end when providing authorization for the
release of the consumer's consumer report for a specific party or period of time.

(c) When a consumer new text begin or representative new text end requests a security freeze, the consumer
reporting agency shall disclose the process of placing and temporarily lifting a freeze,
including the process for allowing access to information from the consumer's consumer
report for a specific party or period of time while the freeze is in place.

Subd. 4.

Temporary lifting or permanent removal of freeze.

(a) If the consumer
new text begin or representative new text end wishes to allow the consumer's consumer report to be accessed for a
specific party or period of time while a freeze is in place, the consumer new text begin or representative
new text end shall contact the consumer reporting agency, request that the freeze be temporarily lifted,
and provide the following:

(1) proper identification, which means that information generally deemed sufficient
to identify a person. Only if the consumer new text begin or representative new text end is unable to sufficiently
provide self-identifying information may a consumer reporting agency require additional
information concerning the consumer's employment and personal or family history in
order to verify the consumer's identity;

(2) the unique personal identification number or password provided by the credit
reporting agency under subdivision 3, paragraph (b); and

(3) the proper information regarding the third party who is to receive the consumer
report or the time period for which the report is to be available to users of the consumer
report.

(b) A consumer reporting agency that receives a request from a consumer new text begin or
representative new text end to temporarily lift a freeze on a consumer report under paragraph (a) shall
comply with the request no later than three business days after receiving the request.

(c) A consumer reporting agency may develop procedures involving the use of
telephone, fax, the Internet, or other electronic media to receive and process a request
from a consumer new text begin or representative new text end to temporarily lift a freeze on a consumer report under
paragraph (a) in an expedited manner, with the goal of processing a request within 15
minutes after the request.

(d) A consumer reporting agency shall remove or temporarily lift a freeze placed on
a consumer report only in the following cases:

(1) upon consumer new text begin or representative new text end request under paragraph (a) or (e); or

(2) when the consumer report was frozen due to a material misrepresentation of
fact by the consumer. When a consumer reporting agency intends to remove a freeze
on a consumer report under this clause, the consumer reporting agency shall notify the
consumer new text begin and the representative new text end in writing three business days prior to removing the
freeze on the consumer report.

(e) A security freeze remains in place until the consumer new text begin or representative new text end requests
that the security freeze be removed. A consumer reporting agency shall remove a security
freeze within three business days of receiving a request for removal from the consumer new text begin or
representative new text end , who provides both of the following:

(1) proper identification, as defined in paragraph (a), clause (1); and

(2) the unique personal identification number or password referenced in paragraph
(a), clause (2).

Subd. 5.

Response by third party to denial of access.

When a third party requests
access to a consumer report on which a security freeze is in effect, and this request is in
connection with an application for credit or the opening of an account and the consumer
new text begin or representative new text end does not allow the consumer's consumer report to be accessed for that
specific party or period of time, the third party may treat the application as incomplete.

Subd. 6.

Nonapplicability.

This section does not apply to the use of a consumer
report by any of the following:

(1) a person or entity, or a subsidiary, affiliate, or agent of that person or entity, or
an assignee of a financial obligation owing by the consumer to that person or entity, or a
prospective assignee of a financial obligation owing by the consumer to that person or
entity in conjunction with the proposed purchase of the financial obligation, with which
the consumer has or had prior to assignment an account or contract, including a demand
deposit account, or to whom the consumer issued a negotiable instrument, for the purposes
of reviewing the account or collecting the financial obligation owing for the account,
contract, or negotiable instrument. For purposes of this clause, "reviewing the account"
includes activities related to account maintenance, monitoring, credit line increases, and
account upgrades and enhancements;

(2) a subsidiary, affiliate, agent, assignee, or prospective assignee of a person
to whom access has been granted under subdivision 4 for purposes of facilitating the
extension of credit or other permissible use;

(3) any federal, state, or local governmental entity, including but not limited to a
law enforcement agency, court, or its agents or assigns;

(4) a private collection agency acting under a court order, warrant, or subpoena;

(5) any person or entity for the purposes of prescreening as provided for by the
federal Fair Credit Reporting Act;

(6) any person or entity administering a credit file monitoring subscription service to
which the consumer has subscribed; and

(7) any person or entity for the purpose of providing a consumer with a copy of the
consumer's consumer report upon the consumer's request.

Subd. 7.

Information to government agencies not affected.

This section does
not prohibit a consumer reporting agency from furnishing to a governmental agency
a consumer's name, address, former address, places of employment, or former places of
employment.

Subd. 8.

Fees.

(a) A consumer reporting agency may charge a fee of $5 for placing,
temporarily lifting, or removing a security freeze unless:

(1) the consumer is a victim of identity theft as defined in subdivision 1, paragraph
(c); and

(2) the consumer new text begin or representative new text end provides the consumer reporting agency with a
valid copy of a police report or a police case number documenting the identity theft.

(b) In addition to the charge, if any, permitted under paragraph (a), a consumer
new text begin or representative new text end may be charged no more than $5 if the consumer new text begin or representative
new text end fails to retain the original personal identification number given to the consumer new text begin or
representative new text end by the agency, but the consumer new text begin or representative new text end may not be charged for a
onetime reissue of the same or a new personal identification number. The consumer new text begin or
representative new text end may be charged no more than $5 for subsequent instances of loss of the
personal identification number.

(c) A consumer new text begin or representative new text end who makes a written request by mail may pay
any fee charged pursuant to this subdivision by check, money order, or credit card. A
consumer new text begin or representative new text end who makes a request by telephone or other electronic media
may pay any fee charged pursuant to this subdivision by credit card.