Bill Text: NJ S3503 | 2016-2017 | Regular Session | Introduced
Bill Title: Prohibits consumer reporting agencies from charging certain fees and including certain provisions in contracts with consumers.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2017-11-09 - Introduced in the Senate, Referred to Senate Commerce Committee [S3503 Detail]
Download: New_Jersey-2016-S3503-Introduced.html
Sponsored by:
Senator STEPHEN M. SWEENEY
District 3 (Cumberland, Gloucester and Salem)
Senator NELLIE POU
District 35 (Bergen and Passaic)
SYNOPSIS
Prohibits consumer reporting agencies from charging certain fees and including certain provisions in contracts with consumers.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning consumer reporting agencies and amending P.L.2005, c.226 and P.L.1997, c.172.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 5 of P.L.2005, c.226 (C.56:11-46) is amended to read as follows:
5. a. A consumer may elect to place a security freeze on his consumer report by:
(1) making a request in writing by certified mail or overnight mail to a consumer reporting agency; or
(2) making a request directly to the consumer reporting agency through a secure electronic mail connection, if an electronic mail connection is provided by the consumer reporting agency.
b. A consumer reporting agency shall place a security freeze on a consumer report no later than five business days after receiving a written request from the consumer. A consumer reporting agency shall not place any condition on placing a security freeze on a consumer report, including, but not limited to, requiring the consumer to waive any rights or indemnify the consumer reporting agency, except as permitted pursuant to this section.
c. The consumer reporting agency shall send a written confirmation of the security freeze to the consumer within five business days of placing the freeze and at the same time 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 his credit for a specific party or period of time.
d. If the consumer wishes to allow his consumer report to be accessed for a specific party or period of time while a freeze is in place, he shall contact the consumer reporting agency via certified or overnight mail or secure electronic mail and request that the freeze be temporarily lifted, and provide all of the following:
(1) Information generally deemed sufficient to identify a person;
(2) The unique personal identification number or password provided by the consumer reporting agency pursuant to subsection c. of this section; and
(3) The proper information regarding the third party who is to receive the consumer report or the time period for which the consumer report shall be available to users of the consumer report.
e. A consumer reporting agency that receives a request from a consumer to temporarily lift a freeze on a consumer report pursuant to subsection d. of this section shall comply with the request no later than three business days after receiving the request.
f. A consumer reporting agency shall 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 consumer report pursuant to subsection d. of this section in an expedited manner. The director shall promulgate regulations necessary to allow the use of electronic media to receive and process a request from a consumer to temporarily lift a security freeze pursuant to subsection d. of this section as quickly as possible, with the goal of processing a request within 15 minutes of that request.
g. A consumer reporting agency shall remove or temporarily lift a freeze placed on a consumer report only in the following cases:
(1) Upon consumer request, pursuant to subsection d. or j. of this section; or
(2) If the consumer report was frozen due to a material misrepresentation of fact by the consumer. If a consumer reporting agency intends to remove a freeze upon a consumer report pursuant to this paragraph, the consumer reporting agency shall notify the consumer in writing at least five business days prior to removing the freeze on the consumer report.
h. If 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 any other use, and the consumer does not allow his consumer report to be accessed for that specific party or period of time, the third party may treat the application as incomplete.
i. (1) At any time that a consumer is required to receive a summary of rights required under section 609 of the federal "Fair Credit Reporting Act," 15 U.S.C. s.1681g, the following notice shall be included:
New Jersey Consumers Have the Right to Obtain a Security Freeze
You may obtain a security freeze on your credit report to protect your privacy and ensure that credit is not granted in your name without your knowledge. You have a right to place a "security freeze" on your credit report pursuant to New Jersey law.
The security freeze will prohibit a consumer reporting agency from releasing any information in your credit report without your express authorization or approval.
The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. When you place a security freeze on your credit report, within five business days you will be provided a personal identification number or password to use if you choose to remove the freeze on your credit report or to temporarily authorize the release of your credit report for a specific party, parties or period of time after the freeze is in place. To provide that authorization, you must contact the consumer reporting agency and provide all of the following:
(i) The unique personal identification number or password provided by the consumer reporting agency;
(ii) Proper identification to verify your identity; and
(iii) The proper information regarding the third party or parties who are to receive the credit report or the period of time for which the report shall be available to users of the credit report.
A consumer reporting agency that receives a request from a consumer to lift temporarily a freeze on a credit report shall comply with the request no later than three business days or less, as provided by regulation, after receiving the request.
A security freeze does not apply to circumstances in which you have an existing account relationship and a copy of your report is requested by your existing creditor or its agents or affiliates for certain types of account review, collection, fraud control or similar activities.
If you are actively seeking credit, you should understand that the procedures involved in lifting a security freeze may slow your own applications for credit. You should plan ahead and lift a freeze, either completely if you are shopping around, or specifically for a certain creditor, a few days before actually applying for new credit.
You have a right to bring a civil action against someone who violates your rights under the credit reporting laws. The action can be brought against a consumer reporting agency or a user of your credit report
.
(2) If a consumer requests information about a security freeze, he shall be provided with the notice provided in paragraph (1) of this subsection and with any other information, as prescribed by the director by regulation, about how to place, temporarily lift and permanently lift a security freeze.
j. A security freeze shall remain 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 the following:
(1) Proper identification; and
(2) The unique personal identification number or password provided by the consumer reporting agency pursuant to subsection c. of this section.
k. A consumer reporting agency shall require proper identification of the person making a request to place or remove a security freeze.
l. The provisions of this section do not apply to the use of a consumer report by the following:
(1) A person, or subsidiary, affiliate, or agent of that person, or an assignee of a financial obligation owing by the consumer to that person, or a prospective assignee of a financial obligation owing by the consumer to that person 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;
(2) A subsidiary, affiliate, agent, assignee, or prospective assignee of a person to whom access has been granted under subsection d. of this section, for purposes of facilitating the extension of credit or other permissible use;
(3) Any State or local agency, law enforcement agency, trial court, or private collection agency acting pursuant to a court order, warrant, or subpoena;
(4) The Division of Taxation in the Department of the Treasury for the purpose of enforcing the tax laws of this State;
(5) A State or local child support enforcement agency;
(6) The use of credit information for the purposes of prescreening as provided for by the federal "Fair Credit Reporting Act," 15 U.S.C. s.1681 et seq.;
(7) Any person or entity administering a credit file monitoring subscription service to which the consumer has subscribed; or
(8) Any person or entity for the purpose of providing a consumer with a copy of the consumer's credit report upon the consumer's request.
m. (1) A consumer reporting agency shall not charge a consumer any fee to place a security freeze on that consumer's consumer report, or to remove or temporarily lift a security freeze on that consumer's consumer report.
(2) [A consumer reporting agency may charge a reasonable fee, not to exceed $5, to a consumer who elects to remove or temporarily lift a security freeze on that consumer's consumer report.] (Deleted by amendment, P.L. , c. )(pending before the Legislature as this bill)
(3) [A consumer may be charged a reasonable fee, not to exceed $5, if the consumer fails to retain the original personal identification number provided by the consumer reporting agency and must be reissued the same or a new personal identification number.] (Deleted by amendment, P.L. , c. )(pending before the Legislature as this bill)
(cf: P.L.2005, c.226, s.5)
2. Section 7 of P.L.1997, c.172 (C.56:11-34) is amended to read as follows:
7. Every consumer reporting agency shall, upon request and proper identification of any consumer, clearly and accurately disclose to the consumer:
a. All information in the consumer's file at the time of the request.
b. The sources of the information; except that the sources of information acquired solely for use in preparing an investigative consumer report and actually used for no other purpose need not be disclosed: provided, that if an action is brought under this act or the federal "Fair Credit Reporting Act," such sources shall be available to the plaintiff under appropriate discovery procedures in the court in which the action is brought.
c. (1) The identification of each person, including each end-user identified under subsections d. and e. of section 5 of this act, who procured a consumer report:
(a) for employment purposes, during the two-year period preceding the date on which the request is made; or
(b) for any other purpose, during the one-year period preceding the date on which the request is made.
(2) An identification of a person under paragraph (1) shall include:
(a) the name of the person, or, if applicable, the trade name written in full under which the person conducts business; and
(b) upon request of the consumer, the address and telephone number of the person.
d. The dates, original payees, and amounts of any checks upon which is based any adverse characterization of the consumer, included in the file at the time of the disclosure.
e. A record of all inquiries received by the agency during the one-year period preceding the request that identified the consumer in connection with a credit or insurance transaction that was not initiated by the consumer.
f. A consumer reporting agency shall not place any condition on providing the information required pursuant to this section, or for providing a free consumer report to a consumer, including, but not limited to, requiring the consumer to waive any rights or indemnify the consumer reporting agency, except as permitted pursuant to the "New Jersey Fair Credit Reporting Act" P.L.1997, c.172 (C.56:11-28 et seq.).
(cf: P.L.1997, c.172, s.7)
3. This act shall take effect immediately.
STATEMENT
This bill amends the New Jersey "Identity Theft Prevention Act" to prohibit a consumer reporting agency from charging a consumer any fee to remove or temporarily lift a security freeze on that consumer's consumer report. Current law prohibits consumer reporting agencies from charging fees to place a security freeze on that consumer's consumer report, but allows a reasonable fee, not to exceed $5, to a consumer who elects to remove or temporarily lift a security freeze on that consumer's consumer report or if the consumer fails to retain the original personal identification number provided by the consumer reporting agency and must be reissued the same or a new personal identification number. The bill removes the provisions allowing a fee to be charged.
The bill also clarifies that a consumer reporting agency shall not place any condition on placing a security freeze on a consumer report, including, but not limited to, requiring the consumer to waive any rights or indemnify the consumer reporting agency, except as permitted pursuant to the "Identity Theft Prevention Act."
The bill also prohibits a consumer reporting agency from placing any condition on providing to a consumer certain information required to be provided pursuant to the "New Jersey Fair Credit Reporting Act" or for providing a free consumer report to a consumer, including, but not limited to, requiring the consumer to waive any rights or indemnify the consumer reporting agency, except as permitted pursuant to the "New Jersey Fair Credit Reporting Act."
Recent reports relating to a security breach at a major consumer reporting agency, Equifax, indicate that in certain circumstances indemnity provisions were added to offers to consumers by the reporting agency to provide free credit reports or credit freezes. The provisions appear to require the consumer to indemnify the agency by accepting the offer of a free report or credit freeze. The bill is intended to prohibit such provisions.
