HF 2843

3rd Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to consumer protections; reducing identity theft and assisting its
victims; providing penalties; amending Minnesota Statutes 2004, sections
13.05, subdivision 5; 138.17, subdivision 7; 609.527, by adding a subdivision;
Minnesota Statutes 2005 Supplement, section 325E.61, subdivisions 1, 4;
proposing coding for new law in Minnesota Statutes, chapters 13; 13C; 325E;
325G.

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

Section 1.

Minnesota Statutes 2004, section 13.05, subdivision 5, is amended to read:

Subd. 5.

Data protection.

new text begin (a) new text end The responsible authority shall (1) establish
procedures to assure that all data on individuals is accurate, complete, and current for the
purposes for which it was collected; and (2) establish appropriate security safeguards for
all records containing data on individuals.

new text begin (b) When not public data is being disposed of, the data must be destroyed in a way
that prevents its contents from being determined.
new text end

Sec. 2.

new text begin [13.651] ATTORNEY GENERAL DATA CODED ELSEWHERE.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin The sections referred to in subdivision 2 are codified outside
this chapter. Those sections classify attorney general data as other than public, place
restrictions on access to government data, or involve data sharing.
new text end

new text begin Subd. 2. new text end

new text begin Identify theft passport. new text end

new text begin Data in an application for an identify theft
passport is classified in section 609.527, subdivision 8.
new text end

Sec. 3.

new text begin [13C.015] SECURITY FREEZES ON CREDIT REPORTS REGARDING
MINORS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms defined in this
subdivision have the meanings given them.
new text end

new text begin (b) "Guardian" means a guardian as defined under section 524.5-102, subdivision 5.
new text end

new text begin (c) "Minor" means an individual under the age of 18 years.
new text end

new text begin (d) "Parent" means a person who has legal and physical custody of a child.
new text end

new text begin (e) "Security freeze" means a situation in which a consumer reporting agency will
not provide a consumer report about a specific consumer to anyone, without a request from
the parent or guardian specifying the entity to whom a consumer report may be provided.
new text end

new text begin Subd. 2. new text end

new text begin Security freeze required at request of parent or guardian of minor.
new text end

new text begin (a) A consumer reporting agency shall impose a security freeze on the credit reports of
a minor at the written request of a parent or guardian of the minor. The written request
must include:
new text end

new text begin (1) the full name and address, date of birth, and Social Security number of the minor;
new text end

new text begin (2) the full name and address of the parent or guardian making the request;
new text end

new text begin (3) a statement that the requesting parent or guardian is a custodial parent or
guardian of the minor; and
new text end

new text begin (4) the signature of the requesting parent or guardian and the date of the signature.
new text end

new text begin (b) The requesting parent or guardian need not give a reason for the request.
new text end

new text begin (c) The security freeze must remain in place until the minor reaches the age of 18
years, unless terminated sooner at the request of the parent or guardian who requested
the freeze.
new text end

new text begin (d) The security freeze must terminate automatically when the minor reaches of
the age of 18 years.
new text end

new text begin Subd. 3. new text end

new text begin Deadlines for imposition of freeze and notice. new text end

new text begin (a) The consumer
reporting agency must impose the freeze no later than 15 days after its receipt of a request
that complies with this section.
new text end

new text begin (b) The consumer reporting agency must notify the requesting person of its
imposition of the security freeze or of the request??a??a??s insufficiency under this section no
later than 20 days after its receipt of the request.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2006.
new text end

Sec. 4.

new text begin [13C.016] VICTIM OF IDENTITY THEFT; SECURITY FREEZE.
new text end

new text begin (a) A victim of identity theft who has submitted a valid police report to a consumer
reporting agency may elect to place a security freeze on his or her report by making
a request in writing by certified mail to a consumer reporting agency. "Security freeze"
means a notice placed in a consumer's credit report, at the request of the consumer and
subject to certain exceptions, that prohibits the consumer reporting agency from releasing
the consumer's credit report or any information from it, in connection with the extension
of credit, without the express authorization of the consumer. If a security freeze is in
place, information from a consumer's credit report may not be released to a third party
without prior express authorization from the consumer. 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's credit report.
new text end

new text begin (b) For purposes of this section and sections 13C.017 to 13C.0191, a "victim of
identity theft" means:
new text end

new text begin (1) a victim of identity theft as defined in section 609.527; or
new text end

new text begin (2) a person who has been notified by an agency, person, or business that owns or
licenses computerized data of a breach in a computerized data system which has resulted
in the acquisition of that person's unencrypted personal information by an unauthorized
person or entity.
new text end

new text begin (c) A consumer reporting agency shall place a security freeze on a consumer's credit
report no later than five business days after receiving a written request from the consumer.
new text end

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

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

new text begin (1) proper identification, which means that information generally deemed sufficient
to identify a person. Only if the consumer is unable to sufficiently identify the consumer
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;
new text end

new text begin (2) the unique personal identification number or password provided by the credit
reporting agency under paragraph (d); and
new text end

new text begin (3) the proper information regarding the third party who is to receive the credit
report or the time period for which the report is available to users of the credit report.
new text end

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

new text begin (g) 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 to temporarily lift a freeze on a credit report under paragraph (e) in an
expedited manner.
new text end

new text begin (h) A consumer reporting agency shall remove or temporarily lift a freeze placed
on a consumer's credit report only in the following cases:
new text end

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

new text begin (2) when the consumer's credit 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's credit report under this paragraph, the consumer reporting agency shall notify
the consumer in writing prior to removing the freeze on the consumer's credit report.
new text end

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

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

new text begin (k) A security freeze remains in place until the consumer 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, who provides
both of the following:
new text end

new text begin (1) proper identification, as defined in paragraph (e), clause (1); and
new text end

new text begin (2) the unique personal identification number or password provided by the consumer
reporting agency under paragraph (d).
new text end

new text begin (l) This section does not apply to the use of a consumer credit report by any of
the following:
new text end

new text begin (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 paragraph, "reviewing
the account" includes activities related to account maintenance, monitoring, credit line
increases, and account upgrades and enhancements;
new text end

new text begin (2) a subsidiary, affiliate, agent, assignee, or prospective assignee of a person to
whom access has been granted under paragraph (e) for purposes of facilitating the
extension of credit or other permissible use;
new text end

new text begin (3) any federal, state, or local entity, including a law enforcement agency, court,
or their agents or assigns;
new text end

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

new text begin (5) a child support agency acting under title IV-D of the federal Social Security Act;
new text end

new text begin (6) the Department of Human Services acting to fulfill any of its statutory
responsibilities;
new text end

new text begin (7) the Internal Revenue Service acting to investigate or collect delinquent taxes or
unpaid court orders or to fulfill any of its other statutory responsibilities;
new text end

new text begin (8) the use of credit information for the purposes of prescreening as provided for
by the federal Fair Credit Reporting act;
new text end

new text begin (9) any person or entity administering a credit file monitoring subscription service to
which the consumer has subscribed; and
new text end

new text begin (10) any person or entity for the purpose of providing a consumer with a copy of his
or her credit report upon the consumer's request.
new text end

Sec. 5.

new text begin [13C.017] SECURITY FREEZE; CHANGES TO INFORMATION;
WRITTEN CONFIRMATION REQUIRED.
new text end

new text begin If a security freeze is in place, a consumer reporting agency may not change any
of the following official information in a consumer credit report without sending a
written confirmation of the change to the consumer within 30 days of the change being
posted to the consumer's file: name, date of birth, Social Security number, and address.
Written confirmation is not required for technical modifications of a consumer's official
information, including name and street abbreviations, complete spellings, or transposition
of numbers or letters. In the case of an address change, the written confirmation shall be
sent to both the new address and to the former address.
new text end

Sec. 6.

new text begin [13C.018] SECURITY FREEZE; NOT APPLICABLE TO CERTAIN
CONSUMER REPORTING AGENCIES.
new text end

new text begin A consumer reporting agency is not required to place a security freeze in a consumer
credit report under section 13C.016 if it acts only as a reseller of credit information by
assembling and merging information contained in the data base of another consumer
reporting agency or multiple consumer reporting agencies, and does not maintain a
permanent data base of credit information from which new consumer credit reports are
produced. However, a consumer reporting agency must honor any security freeze placed
on a consumer credit report by another consumer reporting agency.
new text end

Sec. 7.

new text begin [13C.019] SECURITY FREEZE; EXEMPT ENTITIES.
new text end

new text begin The following entities are not required to place a security freeze in a consumer
credit report under section 13C.016:
new text end

new text begin (1) a check services or fraud prevention services company that issues reports on
incidents of fraud or authorizations for the purpose of approving or processing negotiable
instruments, electronic funds transfers, or similar methods of payments; and
new text end

new text begin (2) a deposit account information service company that issues reports regarding
account closures due to fraud, substantial overdrafts, ATM abuse, or similar negative
information regarding a consumer, to inquiring banks or other financial institutions for
use only in reviewing a consumer request for a deposit account at the inquiring bank or
financial institution.
new text end

Sec. 8.

new text begin [13C.0191] INFORMATION FURNISHED TO A GOVERNMENTAL
AGENCY.
new text end

new text begin Notwithstanding section 13C.016, a consumer reporting agency may furnish to a
governmental agency a consumer's name, address, former address, places of employment,
or former places of employment.
new text end

Sec. 9.

Minnesota Statutes 2004, section 138.17, subdivision 7, is amended to read:

Subd. 7.

Records management program.

A records management program for the
application of efficient and economical management methods to the creation, utilization,
maintenance, retention, preservation, and disposal of official records shall be administered
by the commissioner of administration with assistance from the director of the historical
society. The State Records Center which stores and services state records not in state
archives shall be administered by the commissioner of administration. The commissioner
of administration is empowered to (1) establish standards, procedures, and techniques for
effective management of government records, (2) make continuing surveys of paper work
operations, and (3) recommend improvements in current records management practices
including the use of space, equipment, and supplies employed in creating, maintaining,
preserving and disposing of government records. It shall be the duty of the head of each
state agency and the governing body of each county, municipality, and other subdivision
of government to cooperate with the commissioner in conducting surveys and to establish
and maintain an active, continuing program for the economical and efficient management
of the records of each agency, county, municipality, or other subdivision of government.
When requested by the commissioner, public officials shall assist in the preparation of
an inclusive inventory of records in their custody, to which shall be attached a schedule,
approved by the head of the governmental unit or agency having custody of the records
and the commissioner, establishing a time period for the retention or disposal of each
series of records. When the schedule is unanimously approved by the records disposition
panel, the head of the governmental unit or agency having custody of the records may
dispose of the type of records listed in the schedule at a time and in a manner prescribed in
the schedule for particular records which were created after the approval. A list of records
disposed of pursuant to this subdivision shall be maintained by the governmental unit or
agency. new text begin When records containing not public data as defined in section 13.02, subdivision
8a, are being disposed of under this subdivision, the records must be destroyed in a way
that prevents their contents from being determined.
new text end

Sec. 10.

Minnesota Statutes 2005 Supplement, section 325E.61, subdivision 1, is
amended to read:

Subdivision 1.

Disclosure of personal information; notice required.

(a) Any
person or business that conducts business in this state, and that owns or licenses data that
includes personal information, shall disclose any breach of the security of the system
following discovery or notification of the breach in the security of the data to any resident
of this state whose unencrypted personal information was, or is reasonably believed to
have been, acquired by an unauthorized person. The disclosure must be made in the most
expedient time possible and without unreasonable delay, consistent with the legitimate
needs of law enforcement, as provided in paragraph (c), or with any measures necessary
to determine the scope of the breach, identify the individuals affected, and restore the
reasonable integrity of the data system.

(b) Any person or business that maintains data that includes personal information
that the person or business does not own shall notify the owner or licensee of the
information of any breach of the security of the data immediately following discovery,
if the personal information was, or is reasonably believed to have been, acquired by
an unauthorized person.

(c) The notification required by this section may be delayed to a date certain if a law
enforcement agency affirmatively determines that the notification will impede a criminal
investigation.

(d) For purposes of this section, "breach of the security of the system" means
new text begin successful new text end unauthorized acquisition of computerized data that compromises the security,
confidentiality, or integrity of personal information maintained by the person or business.
Good faith acquisition of personal information by an employee or agent of the person or
business for the purposes of the person or business is not a breach of the security system,
provided that the personal information is not used or subject to further unauthorized
disclosure.

(e) For purposes of this section, "personal information" means an individual's first
name or first initial and last name in combination with any one or more of the following
data elements, when either the name or the data elements is not encrypted:

(1) Social Security number;

(2) driver's license number or Minnesota identification card number; or

(3) account number or credit or debit card number, in combination with any required
security code, access code, or password that would permit access to an individual's
financial account.

(f) For purposes of this section, "personal information" does not include publicly
available information that is lawfully made available to the general public from federal,
state, or local government records.

(g) For purposes of this section, "notice" may be provided by one of the following
methods:

(1) written notice to the most recent available address the person or business has
in its records;

(2) electronic notice, if the notice provided is consistent with the provisions
regarding electronic records and signatures in United States Code, title 15, section 7001; or

(3) substitute notice, if the person or business demonstrates that the cost of providing
notice would exceed $250,000, or that the affected class of subject persons to be notified
exceeds 500,000, or the person or business does not have sufficient contact information.
Substitute notice must consist of all of the following:

(i) e-mail notice when the person or business has an e-mail address for the subject
persons;

(ii) conspicuous posting of the notice on the Web site page of the person or business,
if the person or business maintains one; and

(iii) notification to major statewide media.

(h) Notwithstanding paragraph (g), a person or business that maintains its own
notification procedures as part of an information security policy for the treatment of
personal information and is otherwise consistent with the timing requirements of this
section, shall be deemed to be in compliance with the notification requirements of this
section if the person or business notifies subject persons in accordance with its policies in
the event of a breach of security of the system.

Sec. 11.

Minnesota Statutes 2005 Supplement, section 325E.61, subdivision 4, is
amended to read:

Subd. 4.

Exemption.

This section does not apply to any "financial institution"
as defined by United States Code, title 15, section 6809(3) deleted text begin , and to entities subject to
the federal privacy and security regulations adopted under the federal Health Insurance
Portability and Accountability Act of 1996, Public Law 104-191 deleted text end .

Sec. 12.

new text begin [325E.62] RESPONSIBLE DISPOSAL OF PERSONAL
INFORMATION.
new text end

new text begin (a) Any individual or business entity, including any nonprofit entity, that conducts
business in this state must dispose of its paper or electronic records containing personal
information regarding customers, employees, and other persons only in a manner that
prevents their contents from being determined.
new text end

new text begin (b) For purposes of this section, "personal information" has the meaning given in
section 325E.61, subdivision 1.
new text end

new text begin (c) If an individual or business entity is licensed or regulated by a state agency, that
agency shall enforce this section under its enforcement powers that otherwise apply to
that individual or business entity. If an individual or other business entity is not licensed
or regulated by a state agency, then the attorney general shall enforce this section under
section 8.31.
new text end

new text begin (d) This section does not apply to an individual or business entity that is regulated by
a state or federal agency with respect to disposal of personal information.
new text end

Sec. 13.

new text begin [325E.63] CREDIT FREEZE REGARDING MINORS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms defined in this
subdivision have the meanings given them.
new text end

new text begin (b) "Credit" means the right granted to a borrower to defer payment of a debt, to
incur debt and defer its payment, or to purchase property or services and defer payment.
Credit does not include an overdraft from a person's deposit account, whether through
a check, ATM withdrawal, debit card, or otherwise, that is not pursuant to a written
agreement to pay overdrafts with the right to defer payment of them.
new text end

new text begin (c) "Creditor" means a person or entity doing business in this state.
new text end

new text begin (d) "Guardian" means a guardian as defined under section 524.5-102, subdivision 5.
new text end

new text begin (e) "Minor" means an individual under the age of 18 years.
new text end

new text begin (f) "Parent" means a person who has legal and physical custody of a child.
new text end

new text begin Subd. 2. new text end

new text begin Credit freeze. new text end

new text begin No creditor shall knowingly offer or provide credit to a
minor except at the written request of the parent or guardian of the minor, until the minor
reaches the age of 18 years.
new text end

Sec. 14.

new text begin [325G.052] CREDIT CARD OFFERS AND SOLICITATIONS;
ADDRESS VERIFICATIONS.
new text end

new text begin (a) A credit card issuer that mails an offer or solicitation to receive a credit card and,
in response, receives a completed application for a credit card that lists an address that is
different from the address on the offer or solicitation shall verify the change of address
before issuing a credit card.
new text end

new text begin (b) Notwithstanding any other provision of law, a person to whom an offer or
solicitation to receive a credit card is made is not liable for the unauthorized use of a
credit card issued in response to that offer or solicitation if the credit card issuer does not
verify the change of address pursuant to paragraph (a) before the issuance of the credit
card, unless the credit card issuer proves that this person actually incurred the charge
on the credit card.
new text end

new text begin (c) When a credit card issuer receives a written or oral request for a change of the
cardholder's billing address and then receives a written or oral request for an additional
credit card within ten days after the requested address change, the credit card issuer shall
not mail the requested additional credit card to the new address or, alternatively, activate
the requested additional credit card, unless the credit card issuer has verified the change
of address.
new text end

Sec. 15.

Minnesota Statutes 2004, section 609.527, is amended by adding a subdivision
to read:

new text begin Subd. 8. new text end

new text begin Identity theft passport. new text end

new text begin (a) For purposes of this subdivision:
new text end

new text begin (1) "identity theft" means a violation of subdivision 2; and
new text end

new text begin (2) "identity theft passport" means a card or certificate issued by the attorney general
that identifies a person who has filed with a local or state law enforcement agency in this
state a signed written report that the person is a victim of an alleged crime of identity theft.
new text end

new text begin (b) A person who is a victim of identity theft in this state, or who is a resident of
this state, and who has filed with a law enforcement agency in this state a signed written
report stating that the person is a victim of identity theft, may apply for an identity theft
passport through any law enforcement agency of this state.
new text end

new text begin (c) A law enforcement agency that receives an application for an identity theft
passport shall submit the application and a copy of the written report to the attorney
general for processing and issuance of an identity theft passport to the applicant.
new text end

new text begin (d) The attorney general, in cooperation with a law enforcement agency, may issue
an identity theft passport under this subdivision to a victim of identity theft.
new text end

new text begin (e) A person who has been issued an identity theft passport under this subdivision
may present it to:
new text end

new text begin (1) a law enforcement agency to aid in the investigation of identity theft or to help
prevent the arrest or prosecution of the person for an offense committed by another person
using the identity of the holder of the passport; or
new text end

new text begin (2) a creditor to aid in the investigation of any fraudulent account opened in the
person's name or of any fraudulent charge made against an account in the person's name.
new text end

new text begin (f) A law enforcement agency or creditor that is presented with an identity theft
passport has sole discretion to accept or reject the passport. In making that determination,
the law enforcement agency or creditor may consider the surrounding circumstances and
available information regarding the alleged identity theft.
new text end

new text begin (g) An application for an identity theft passport, including any supporting
documentation, is private data on individuals as defined in section 13.02, subdivision 12,
except that it may be released to a law enforcement agency in this or another state.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2006.
new text end

Sec. 16. new text begin ADMISSIBILITY OF EVIDENCE OF IDENTITY THEFT; REQUEST
TO SUPREME COURT.
new text end

new text begin The Minnesota Supreme Court is requested to consider amending its rules of
evidence to permit admission of business records, at least in civil and criminal cases
alleging identity theft, based upon an authenticating affidavit of the custodian of the
business records, rather than requiring the in-person authentication testimony of the
custodian of the business records. One model for such a rule is California Evidence Code,
sections 1560 to 1567.
new text end