Legislature(2017 - 2018)BARNES 124
04/17/2017 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB195 | |
| HB222 | |
| SB93 | |
| SB64 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 222 | TELECONFERENCED | |
| + | SB 93 | TELECONFERENCED | |
| + | SB 64 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 195 | TELECONFERENCED | |
SB 93-CREDIT REPORT SECURITY FREEZE
4:04:32 PM
CHAIR KITO announced that the third order of business would be
SENATE BILL NO. 93, "An Act relating to security freezes on the
credit reports or records of incapacitated persons and certain
minors."
4:04:47 PM
RYNNIEVA MOSS, Staff, Senator John Coghill, Alaska State
Legislature, on behalf of Senator Coghill, prime sponsor,
introduced SB 93. She said the bill looks familiar because last
year [Twenty-Ninth Alaska State Legislature] the House addressed
Senate Bill 121, which created a security freeze on minors and
incapacitated consumers, or protected consumers, which are
consumers who may be over age 16 or 18 but unable to take care
of themselves. She stated that SB 93 takes up where Senate Bill
121 left off. In the last hours of last year's session,
Representative Claman tried to add this language to Senate Bill
121, but it was just too late in the process to happen.
MS. MOSS stated that SB 93 would set up a system to freeze a
minor's or incapacitated person's credit report. This is
important, she pointed out, because it is never considered that
children could be victims of identity theft and that is what
this bill is about. About 1.3 million kids in the U.S. are
victims of identity theft annually and approximately 50 percent
of them are children six years old or younger. This addresses a
system to set this up because it is much different than freezing
an adult's credit report. An adult already has a credit report
and a credit history. A minor or incapacitated person usually
doesn't, so there is nothing to freeze.
MS. MOSS explained that to freeze a minor's or incapacitated
person's credit report - which doesn't exist - a parent,
guardian, or legal representative must go to a credit reporting
agency and request that freeze. If there isn't a record or a
report, the credit-reporting agency will create what is called a
credit record and to do that the credit-reporting agency will
have to make verification on many pieces of information. When
an adult goes into a credit-reporting agency this happens almost
instantaneously, she noted, because an adult has a credit
report. However, she continued, when dealing with a minor or
someone who doesn't have a credit report, the credit report must
be established. This is done by the parent or [personal]
representative asking that the credit report be secured,
reporting certain information, and proving that they have the
authority to make that request, which could be a court order for
a personal representative or a birth certificate and
identification (ID) for both the minor and the parent. The
consumer agency then creates a credit record for a fee of $5.00.
This fee is under statute and is the same fee that is paid by an
adult to get a credit report frozen. The placement of the
freeze could take up to a month for a child or incapacitated
person because of that verification and checking of the records.
MS. MOSS pointed out that the length of the security report
would last for as long as the parent or personal representative
requests. It could be lifted it at any time and to lift it the
parent or representative would have to verify who they say they
are and that they have the legal authority to do so. She said
the exception to that would be when a minor turns 16 years of
age and has a job, a car, or a cell phone, and has basically
created a credit report, at which point the minor can lift the
freeze, if desired. Another exception, she stated, is if an
incapacitated person becomes self-sufficient and can prove with
a court record that they are no longer incapacitated and then
the freeze could be lifted. Another exception to lifting that
freeze, she noted, would be if the information that was given to
the credit reporting agency was misrepresented, which would
allow the credit reporting agency to lift the freeze itself.
Lifting the freeze would cost $5.00, she continued, except there
would be no fee in the case of identity theft for which a police
report or court document can be produced.
MS. MOSS added that there are a few exceptions in the bill.
There are people who collect data secondhand; they don't create
that data. That would be, say, a government agency that is
collecting back taxes or child support or a department of
revenue, and they would not be required to freeze credit reports
because they do not create credit reports, they collect credit
reports.
4:10:41 PM
REPRESENTATIVE SULLIVAN-LEONARD asked what prompted the bill;
for example, whether something happened when someone turned 18
and tried getting credit cards but couldn't because their Social
Security number had been compromised.
MS. MOSS replied that the credit reporting agencies have
requested this. She said 27 states other than Alaska have
adopted these statutes because identity theft in children is a
growing concern. Children are easy targets and it is a very
easy way for people who create false credit, collect credit
cards under false credit, or file false tax returns with the
Internal Revenue Service using minors' Social Security numbers.
4:11:53 PM
REPRESENTATIVE BIRCH stated he likes this idea. He inquired
whether Social Security numbers are nowadays assigned at birth.
MS. MOSS responded that there are exceptions; for example, her
children didn't get their Social Security numbers until they
were 13 years old. However, she continued, she thinks most
people do get a Social Security number at birth.
CHAIR KITO opened invited testimony.
4:13:12 PM
CARLIE CHRISTENSEN, Director of Government Relations, Equifax
Inc., testified that Equifax supports SB 93. She said SB 93
would specify the manner in which a protected consumer's
representative must submit a request to a credit reporting
agency, including sufficient proof of identification and
authority to act on behalf of the protected consumer. By
incorporating these specific requirements into the existing
Alaska credit report security screen statute, affected consumers
will be more protected from the risk of their freeze being
either unduly placed on their credit file or unduly removed by
someone who isn't authorized to act on behalf of that
individual. This would bring Alaska law more in line with the
other states that have minor freeze statutes specifying how to
handle these requests and to do it consistently, she added.
4:14:34 PM
REPRESENTATIVE BIRCH offered his recognition that Equifax is a
private entity and asked whether Equifax or others in the same
business of credit scoring keep digital copies of things such as
proof of identification authority, Social Security, and birth
certificates. He further asked whether Equifax has a copy of
his birth certificate.
MS. CHRISTENSEN answered that if it is something for placing a
security freeze on behalf of a minor, Equifax may have to retain
that. But, she added, she doesn't know the exact specifics of
Equifax retaining that information or if it something that is
just presented to Equifax. She said she would have to get back
to the committee with the specifics.
4:16:20 PM
SARAH LASHFORD, Manager of Government Relations, Consumer Data
Industry Association (CDIA), testified in support of SB 93. She
said CDIA is an international trade association founded in 1906
with more than 130 corporate members. Its mission is to enable
consumers, media, legislators, and regulators to understand the
benefits of responsible use of consumer data, which creates
opportunities for consumers and the economy. She explained that
the members of CDIA provide businesses with the data and the
analytical tools necessary to manage risk and that CDIA members
help ensure fair and safe transactions for consumers to
facilitate competition and expand consumer's access to the
market, which is innovative and focused on their needs. She
stated that the products of CDIA members are used in more than 9
billion transactions each year.
MS. LASHFORD said SB 93 would provide additional protection for
identity theft. She recounted that in 2016 the Alaska State
Legislature passed Senate Bill 121 to offer a credit freeze for
the consumer records of minors. Providing protection for those
exposed to the dangers of identity theft was a step in the right
direction. However, she advised, by placing the authorization
in the same section of statute as that for adults, the statute
lacks additional protection that 27 other states have now
adopted. These additional measures help to safeguard against
fraud and identity theft as well as ensure consistency. She
said SB 93 provides clear guidance and standards for handling
minors' credit. She offered CDIA's belief that SB 93 maintains
the original intent of the 2016 legislation while adding
uniformity and consistency with other states' laws. She urged
committee members to support SB 93 to provide the same level of
protection as the other 27 states that have adopted a freeze for
minors and incapacitated adults.
4:18:35 PM
REPRESENTATIVE BIRCH stated that SB 93 appears to be a good
measure and offered his appreciation for learning more about how
to protect children with this opportunity.
4:19:07 PM
CHAIR KITO kept public testimony open after ascertaining that no
one else wished to testify on the bill at this time.
CHAIR KITO held over SB 93.
REPRESENTATIVE BIRCH asked why the chair is holding the bill.
CHAIR KITO replied that he typically likes to have two meetings
for each bill that is before the committee so there is an
opportunity to address any questions that are not fully answered
and to give an opportunity for amendments to come forward.