Legislature(2015 - 2016)BELTZ 105 (TSBldg)
01/26/2016 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB121 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 121 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 121-SECURITY FREEZE ON MINOR'S CREDIT REPORT
1:32:25 PM
CHAIR COSTELLO announced the consideration of SB 121.
1:33:04 PM
EDRA MORLEDGE, Staff, Senator Kevin Meyer, introduced SB 121 on
behalf of the sponsor. Describing the legislation as a consumer
protection bill, she said state legislatures and the federal
government work continually on measures to prevent and combat
the crimes of identity theft and financial fraud. An area of
growing concern is child identity theft because many years can
go by before it is recognized. She continued the introduction
speaking to the following sponsor statement:
SB 121 allows a parent or legal guardian to place a
security freeze on a minor's credit report, and allows
for the creation of a credit file by a credit bureau
in order to place a freeze if none currently exists.
Alaska statute does not specifically state that a
parent or legal guardian can request a freeze on a
minor's credit report, and while the credit bureaus
have generally allowed parents to do so in the past,
SB 121 will expressly permit this action.
According to the 2012 Child Identity Theft Report,
children are 35 times more likely to be subject to
identity theft than adults, increasing the possibility
that a parent or the minor would not catch such a
crime until reported to a collection agency, or until
the individual applies for credit or financial aid.
Unfortunately, clearing up fraudulent claims on a
credit file can take from several months to several
years, and could severely limit the options for young
people just entering adulthood.
SB 121 will give parents and guardians a much needed
tool to safeguard their dependent children against
identity theft and financial fraud prior to the crime
occurring. At least 11 other states have passed or are
in the process of passing legislation to do the same.
MS. MORLEDGE reported that Alaska is one of 27 states that
allows a consumer to place a security freeze on their account,
but has no specific provision for minors or protected
individuals. Five states specify that a parent or guardian of a
minor under age 18 can place a freeze and a majority of states
provide some combination of under 16 years of age, under 18
years of age and/or a parent or guardian of a protected consumer
or incapacitated individual.
1:36:03 PM
SENATOR GIESSEL asked which five states have a specific
provision allowing a parent or guardian of a minor under age 18
to place a freeze.
MS. MORLEDGE clarified that there are just four and named
Connecticut, Illinois, Montana, and Nebraska.
SENATOR STEVENS raised a question about the language, "has not
had the disabilities of a minor removed ..." and asked if there
might be a better way to say that.
MS. MORLEDGE explained that it refers to minors that have been
emancipated at age 16. They are no longer dependent on their
parents to make decisions. She offered to provide a copy of the
statute.
SENATOR STEVENS questioned the reason for writing the clause in
the negative, because it leads to confusion.
MS. MORLEDGE offered her understanding that it was drafted that
way because Sec. 09.55.590 is titled "Removal of disabilities of
minority." She added, "We would certainly be able to reword the
statute to make that more clear."
1:38:44 PM
SENATOR ELLIS asked where the idea for the legislation came
from.
MS. MORLEDGE replied a constituent brought the issue forward and
when she researched the matter she found that many states have a
similar statute.
SENATOR ELLIS asked if Alaska would be the fifth state to adopt
this legislation.
MS. MORLEDGE answered yes. She reiterated that a majority of
states statutorily provide some combination of under 16 years of
age, under 18 years of age and/or a parent or guardian of a
protected consumer or incapacitated individual. She said she
found that one reason for the terminology "16 years of age and
younger" is because individuals older than that can apply for
federal and state student aid. "So there is a question as to
whether or not you want to make that age explicitly 16 years of
age and younger or keep it at 18."
She highlighted that the Department of Law questioned whether
the statute could be construed to assume that only a person 18
years of age and older could unfreeze their own credit, but
Legislative Legal opined that a child 16 years of age and older
isn't prohibited from lifting their own freeze. She advised that
the sponsor is amenable to the policy call of the committee.
1:41:54 PM
SENATOR MEYER added that the constituent who brought the issue
forward said that Delaware, Georgia, Florida, Hawaii, Illinois,
Maine, Maryland, Massachusetts, Michigan, Minnesota, and Texas
have passed or are in the process of passing similar
legislation. He that the constituent could provide the source of
that information.
1:42:37 PM
CHAIR COSTELLO asked Ms. Williams if the administration has a
position on the legislation. She also asked her to address
Senator Steven's question about the use of the negative in the
last sentence.
1:43:33 PM
DAVYN WILLIAMS, Assistant Attorney General, Civil Division,
Commercial and Fair Business Section, Consumer Protection Unit,
Department of Law (DOL), Anchorage, Alaska, stated that many
states have passed legislation similar to SB 121 due to concern
about data breaches and the potential for unauthorized access to
credit information of minor children. Legislation of this type
is designed to give consumers additional protection. She said
the department is neutral on the idea of parents being able to
create credit reports for minors and then freezing them, but
recognizes that many consumers like that additional protection.
MS WILLIAMS confirmed that the Department of Law questioned
whether the statute could be construed to assume that only a
person 18 years of age and older could unfreeze their own
credit. If the statute isn't specific, it could be burdensome
for the person who is trying to lift the freeze. On the other
hand, a person under age 18 could enter a contract to buy a
vehicle, for example, and then get out of the contract by
raising the defense of infancy or disability. She noted that,
"09.55.990 allows a minor to go to court and emancipate
themselves and then they're able to do things for themselves
that generally a minor would have to have a parent do for them,
and it requires a court order in that case under that statute."
1:46:20 PM
CHAIR COSTELLO asked if a an employee of a credit rating agency
who receives a request to place a freeze on a minor's credit
account would need to look through that state's statutes to see
if it was authorized.
MS. WILLIAMS answered yes, but the three major credit bureaus
are probably accustomed to checking different state statures
because a number of states have this type of law.
CHAIR COSTELLO asked what the burden is for someone to verify
that they are the parent.
MS. WILLIAMS replied some states specify what is needed, and the
credit bureaus generally list the standards of identification on
their website. Often it's a birth certificate or some type of
court order stating that the person is the legal guardian of the
minor, she said.
CHAIR COSTELLO asked what the national average is for identity
theft of minors.
1:48:02 PM
MS. MORLEDGE said the information might be in 2012 report from
the AllClearID Alert Network titled "Child Identity Theft"
that's in the packets, but she would do follow up research and
provide the information.
CHAIR COSTELLO opened public testimony.
1:48:51 PM
Laura Hughes, representing herself, Anchorage, Alaska, stated
support for SB 121. She explained that she and her husband froze
their credit after they purchased their house. They tried to do
the same for their daughter after she was born, because they'd
heard that minors are more susceptible than adults to identity
theft. "They're essentially a clean slate and you don't know
that their identity has been stolen until they are 16 or 18,"
she said. When they found that the state didn't have a process
to do this they contacted Senator Meyer's office. Responding to
an earlier question, she said she recently read that one child
in ten is a victim of identity theft.
1:50:52 PM
CHAIR COSTELLO closed public testimony.
SENATOR STEVENS asked what the process is to lift a credit
freeze once a child reaches age 18 or is emancipated.
MS. MORLEDGE explained that current statutes that govern
security freezes provide that the individual him or herself must
contact the credit bureau. "It can be as easy as a phone call
and then following up with documentation," she said.
[CHAIR COSTELLO held SB 121 in committee.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 121.pdf |
SL&C 1/26/2016 1:30:00 PM |
SB 121 |
| SB 121 - Sponsor Statement.pdf |
SL&C 1/26/2016 1:30:00 PM |
SB 121 |
| SB 121 - Leg. Legal Memo.pdf |
SL&C 1/26/2016 1:30:00 PM |
SB 121 |
| SB 121 - Fiscal Note - Dept. of Law.pdf |
SL&C 1/26/2016 1:30:00 PM |
SB 121 |
| Child ID Theft Report 2012.pdf |
SL&C 1/26/2016 1:30:00 PM |