New Jersey-2016-A504-Introduced

An Act concerning consumer reporting agencies and supplementing P.L.1997, c.172 (C.56:11-28 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. For the purposes of this act:

"Protected consumer" means an individual who is under the age of 16 years at the time a request for the placement of a security freeze is made, or an incapacitated person or a protected person for whom a guardian or conservator has been appointed.

"Representative" means a person who may act on behalf of a protected consumer and who provides a consumer reporting agency sufficient proof of authority to act on behalf of a protected consumer.

"Security freeze" means:

(1) if a consumer reporting agency does not have a file pertaining to a protected consumer, a restriction that is placed on the protected consumer's consumer record and a prohibition on the consumer reporting agency from releasing the protected consumer's consumer record except as provided in this act; or

(2) if a consumer reporting agency has a file pertaining to the protected consumer, a restriction that is placed on the protected consumer's consumer report, prohibiting the consumer reporting agency from releasing the protected consumer's consumer report or any information derived from the protected consumer's consumer report except as provided in this act.

"Sufficient proof of authority" means documentation that shows a representative has authority to act on behalf of a protected consumer, and includes: an order issued by a court of law; a lawfully executed and valid power of attorney; and a written, notarized statement signed by a representative that expressly describes the authority of the representative to act on behalf of a protected consumer.

"Sufficient proof of identification" means information or documentation that identifies a protected consumer or a representative of a protected consumer, and includes: a Social Security number or a copy of a Social Security card issued by the Social Security Administration; a certified or official copy of a birth certificate issued by the entity authorized to issue the birth certificate; a copy of a State-issued driver's license, or any other government-issued identification; or a copy of a bill, including a bill for telephone, sewer, septic tank, water, electric, oil, or natural gas services, that shows a name and home address.

2. a. A consumer reporting agency shall place a security freeze for a protected consumer within 30 days of receiving a security freeze request, if:

(1) The consumer reporting agency receives a request from the protected consumer's representative for the placement of the security freeze under this section; and

(2) The protected consumer's representative:

(a) Submits the request to the consumer reporting agency at the address or other point of contact and in the manner specified by the consumer reporting agency;

(b) Provides to the consumer reporting agency sufficient proof of identification of the protected consumer and the representative; and

b. If a consumer reporting agency does not have a consumer report on record pertaining to a protected consumer when the consumer reporting agency receives a request pursuant to this section, the consumer reporting agency shall create a consumer report for the protected consumer.

3. a. If a protected consumer or a protected consumer's representative wishes to remove a security freeze for the protected consumer, the protected consumer or the protected consumer's representative shall:

(1) Submit a request for the removal of the security freeze to the consumer reporting agency at the address or other point of contact and in the manner specified by the consumer reporting agency;

(2) Pay any fee, not to exceed $5, required by the consumer reporting agency to remove a security freeze; and

(3) Provide to the consumer reporting agency:

(a) In the case of a request by the protected consumer:

(i) Proof that the sufficient proof of authority for the protected consumer's representative to act on behalf of the protected consumer is no longer valid; and

(ii) Sufficient proof of identification of the protected consumer; or

(b) In the case of a request by the representative of a protected consumer:

(i) Sufficient proof of identification of the protected consumer and the representative; and

(ii) Sufficient proof of authority to act on behalf of the protected consumer.

b. Unless a security freeze for a protected consumer is removed in accordance with this section, a consumer reporting agency shall not release the protected consumer's consumer report, any information derived from the protected consumer's consumer report, or any record created for the protected consumer.

c. Except as provided in subsection e. of this section, a security freeze for a protected consumer placed under section 2 of this act shall remain in effect until the protected consumer or the protected consumer's representative requests the consumer reporting agency to remove the security freeze in accordance with this section.

d. Within 30 days after receiving a request that meets the requirements of this section, the consumer reporting agency shall remove the security freeze for the protected consumer.

e. A consumer reporting agency may remove a security freeze for a protected consumer or delete a consumer report of a protected consumer if the security freeze was placed, or the consumer report was created, based on a material misrepresentation of fact by the protected consumer or the protected consumer's representative.

4. a. Any person who willfully fails to comply with the requirements of this act with respect to a protected consumer shall be liable to the protected consumer in an amount equal to the sum of:

(1) any actual damages sustained by the protected consumer as a result of the failure or damages of not less than $100 and not more than $1,000;

(2) such amount of punitive damages as the court may allow; and

(3) in the case of any successful action to enforce any liability, the costs of the action together with reasonable attorneys' fees as determined by the court.

b. Any person who negligently fails to comply with the requirements of this act with respect to a protected consumer shall be liable to the protected consumer in an amount equal to the sum of:

(1) any actual damages sustained by the protected consumer as a result of the failure; and

(2) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorneys' fees as determined by the court.

5. This act shall not apply to the use of a protected consumer's consumer report by any person or entity exempted under subsection 1. of section 5 of P.L.2005, c.226 (C.56:11-46) or any entity exempted under section 7 or 8 of P.L.2005, c.226 (C.56:11-48 and 49).

6. This act shall take effect on the 90th day following enactment.

STATEMENT

This bill requires consumer reporting agencies to place a security freeze on a protected consumer's credit report under certain circumstances. The bill defines protected consumer as an individual who is under the age of 16 years at the time a request for the placement of a security freeze is made; or an incapacitated person or a protected person for whom a guardian or conservator has been appointed. The bill allows the representatives of protected consumers to freeze their credit records, in order to protect them against identity theft or other misuse of their credit information.

Specifically, the bill requires consumer reporting agencies to place a security freeze for a protected consumer within 30 days of receiving a security freeze request, if the consumer reporting agency receives a request from the protected consumer's representative for the placement of the security freeze. Additionally, the bill requires the protected consumer's representative to: submit the request to the consumer reporting agency at the address or other point of contact and in the manner specified by the consumer reporting agency; provide to the consumer reporting agency sufficient proof of identification of the protected consumer and the representative; and provide the consumer reporting agency sufficient proof of authority to act on behalf of the protected consumer.

The bill provides that if a consumer reporting agency does not have a consumer report on record pertaining to a protected consumer when the consumer reporting agency receives a request, the consumer reporting agency shall create a consumer report for the protected consumer.

The bill also establishes procedures for a protected consumer or protected consumer's representative to remove a security freeze. Under the bill, a protected consumer or a protected consumer's representative who wishes to remove a security freeze must submit a request for the removal of the security freeze to the consumer reporting agency at the address or other point of contact and in the manner specified by the consumer reporting agency and pay any fee, not to exceed $5, required by the consumer reporting agency to remove a security freeze. The bill also provides procedures for the removal of a security freeze by a protected consumer or a protected consumer's representative.

The bill provides that unless a security freeze for a protected consumer is removed in accordance with the bill, a consumer reporting agency may not release the protected consumer's consumer report, any information derived from the protected consumer's consumer report, or any record created for the protected consumer and that the security freeze remains in effect until the protected consumer or the protected consumer's representative requests that the consumer reporting agency remove the security freeze. The bill also provides that a consumer reporting agency may remove a security freeze for a protected consumer or delete a consumer report of a protected consumer if the security freeze was placed or the consumer report was created based on a material misrepresentation of fact by the protected consumer or the protected consumer's representative.

The bill provides that a person who willfully fails to comply with the requirements of the bill with respect to a protected consumer is liable to the protected consumer in an amount equal to the sum of: (1) any actual damages sustained by the protected consumer as a result of the failure or damages of not less than $100 and not more than $1,000; (2) such amount of punitive damages as the court may allow; and (3) in the case of any successful action to enforce any liability, the costs of the action together with reasonable attorneys' fees as determined by the court. The bill provides that a person who is negligent in failing to comply with the requirements of the bill with respect to any protected consumer is liable to that protected consumer in an amount equal to the sum of: (1) any actual damages sustained by the protected consumer as a result of the failure; and (2) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorneys' fees as determined by the court.