02/19/2003 03:17 PM House L&C

HB  85-CREDIT REPORTS                                                                                                         
                                                                                                                                
Number 0076                                                                                                                     
                                                                                                                                
CHAIR ANDERSON announced  that the first order  of business would                                                               
be  HOUSE  BILL  NO.  85,  "An  Act  requiring  certain  consumer                                                               
reporting agencies  to provide  individuals with  certain reports                                                               
without charge."                                                                                                                
                                                                                                                                
REPRESENTATIVE  CRAWFORD, sponsor  of  HB 85,  explained that  it                                                               
provides a  free credit  report to a  consumer at  the consumer's                                                               
request.    The  purpose  is to  protect  people  from  so-called                                                               
identify theft.   He said there's only one good  way to protect a                                                               
person from  identify theft, and  that's to  know what is  on the                                                               
person's credit report.  Six  states presently have similar laws,                                                               
and  another  twelve states  are  considering  legislation.   The                                                               
majority of  states will  require free  annual credit  reports in                                                               
the  near future.   A  regular  credit report  protects both  the                                                               
business and the  consumer by reducing fraudulent  purchases.  An                                                               
estimated  750,000  people are  victims  of  identity theft  each                                                               
year.   He stated that this  is the only effective  way to reduce                                                               
that rapidly growing number.                                                                                                    
                                                                                                                                
Number 0249                                                                                                                     
                                                                                                                                
STEVE   CLEARY,  Executive   Director,  Alaska   Public  Interest                                                               
Research Group (AkPIRG),  spoke in support of HB 85.   He said he                                                               
appreciates  the simplicity  of the  bill  and the  fact that  it                                                               
protects both consumers and businesses  that are hurt by identity                                                               
theft.   He  stated  that  Alaskan consumers  need  this tool  to                                                               
protect themselves.   He asked whether credit  scores should also                                                               
be provided free to the consumer  under HB 85.  Credit scores and                                                               
credit reports are  used to deny credit to people.   He said it's                                                               
valuable  for   the  consumer  to   know  and  to   receive  this                                                               
information,  particularly if  it's erroneous.   The  bill should                                                               
not pose an  undue burden on credit companies  because the report                                                               
is only issued once annually per customer.                                                                                      
                                                                                                                                
Number 0398                                                                                                                     
                                                                                                                                
ED SNIFFEN,  Assistant Attorney General, Fair  Business Practices                                                               
Section,   Civil  Division   (Anchorage),   Department  of   Law,                                                               
testified that his agency does not  oppose this bill.  He said it                                                               
is a good step in  the right direction towards thwarting identity                                                               
theft, which in  2002 was the number-one  fraud category reported                                                               
to the department.  He said  it's very difficult to stop identity                                                               
theft other  than getting a credit  report on a regular  basis to                                                               
see  if  someone is  using  a  person's information  for  illegal                                                               
purposes.  He said the department  did not see any legal problems                                                               
with the bill.  Other states  have adopted this kind of language,                                                               
and similar laws have withstood court challenges.                                                                               
                                                                                                                                
REPRESENTATIVE  CRAWFORD  explained  why credit  scoring  is  not                                                               
covered in  HB 85.  He  said credit scoring was  a separate issue                                                               
and  should  be dealt  with  in  other  legislation.   This  bill                                                               
addressed  identify-theft, not  how a  person's credit  score was                                                               
calculated or used.                                                                                                             
                                                                                                                                
Number 0525                                                                                                                     
                                                                                                                                
CHAIR  ANDERSON asked  whether HB  85 will  increase the  cost of                                                               
credit  reports   to  banks,  credit  unions,   car  dealers,  or                                                               
insurance agents.                                                                                                               
                                                                                                                                
REPRESENTATIVE  CRAWFORD  responded  that he  hasn't  heard  that                                                               
similar legislation has  increased the cost of  credit reports to                                                               
businesses in  other states.   But he  predicted HB 85  will save                                                               
businesses  money  by  reducing  the   amount  of  fraud.    It's                                                               
difficult  for  businesses to  confirm  the  identities of  their                                                               
customers,  so they  must write  off their  losses as  a cost  of                                                               
doing  business.   He said  the only  way to  guard against  this                                                               
fraudulent use of  identities is by making it easy  for people to                                                               
regularly review their credit reports.                                                                                          
                                                                                                                                
CHAIR ANDERSON  asked whether  people can  get credit  reports on                                                               
line.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  CRAWFORD said  there are  no free  credit reports                                                               
for  Alaskan residents.   The  free online  credit reports  are a                                                               
promotion for a subscription service.                                                                                           
                                                                                                                                
Number 0714                                                                                                                     
                                                                                                                                
REPRESENTATIVE GUTTENBERG moved to report  HB 85 out of committee                                                               
with individual recommendations and  the accompanying zero fiscal                                                               
note.   There being  no objection,  HB 85  was reported  from the                                                               
House Labor and Commerce Standing Committee.