Legislature(2015 - 2016)BELTZ 105 (TSBldg)
02/08/2016 01:30 PM Senate JUDICIARY
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| Audio | Topic |
|---|---|
| Start | |
| SB121 | |
| SJR15 | |
| SCR4 | |
| HB8 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 121 | TELECONFERENCED | |
| + | HB 8 | TELECONFERENCED | |
| += | SJR 15 | TELECONFERENCED | |
| += | SCR 4 | TELECONFERENCED | |
SB 121-SECURITY FREEZE ON MINOR'S CREDIT REPORT
1:34:40 PM
CHAIR MCGUIRE announced the consideration of SB 121.
1:35:08 PM
SENATOR KEVIN MEYER, Alaska State Legislature, sponsor of SB
121, stated that this is a consumer protection bill, aimed at
protecting children before they become victims of identity
theft. His constituent, Laura Hughes, brought the issue to his
attention.
CHAIR MCGUIRE asked if the impetus was a constituent who had a
personal story.
SENATOR MEYER replied his constituent would explain how she and
her family were impacted.
SENATOR WIELECHOWSKI commented that he, too, has constituents
who have expressed concern with this issue so he was pleased to
see the bill.
1:36:57 PM
EDRA MORLEDGE, Staff, Senator Kevin Meyer, introduced SB 121 on
behalf of the sponsor, speaking to the following prepared
comments:
As you know, identity theft and financial fraud is a
constant concern for consumers. State legislatures and
the federal government are constantly working on
measures to combat ID theft and protect individuals
against these crimes.
An area of growing concern is child identity theft,
which is much more prevalent than adult identity
theft, as their credit is basically a 'blank slate'
for many years.
Since children in general, do not begin to establish
credit until they're 18 years old or at the time they
apply for financial aid for higher education (which
can be as early as age 16 in this state), many years
can go by before identity theft is caught. SB 121 is
designed to prevent this, and is a measure to protect
children before they become consumers.
This legislation is designed to do two things:
1, it allows a parent or guardian to place a security
freeze on a minor child or dependent's credit report,
in order to prevent fraudulent financial activity.
2, if no credit report exists (presumably because the
child has not established credit yet), the parent can
request that one be created in order to place the
freeze. For example, the parents of a new born or
adopted child could request a credit agency create a
credit file and then place the freeze.
Traditionally, a credit freeze has usually only been
requested after some type of fraudulent activity has
been detected - this legislation will change that and
give parents and guardians proactive tools to prevent
identity theft.
Across the country there a large mix of state laws
allowing credit freezes:
27 States, including Alaska, allow "any consumer" to
place a security freeze with no provision for minors
or protected individuals.
4 States specify that a parent or guardian of a minor
under 18, can place freeze.
And the majority of states provide for allowing a
parent or guardian of a "protected consumer" to place
a freeze on an incapacitated individual or a minor
under 16.
3 states allow a security freeze to be placed only if
the individual is a victim of id theft, and some
provide for only residents of the state to place the
freeze.
1:39:50 PM
LAURA HUGHES, representing herself, testified in support of SB
121. She explained that she and her husband froze their credit
after they purchased their house, and she tried to do the same
after their daughter 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 Alaska didn't have a process to do this, they
contacted Senator Meyer's office.
DAVYN WILLIAMS, Assistant Attorney General, Civil Division,
Commercial and Fair Business Section, Department of Law (DOL),
Anchorage, Alaska, introduced herself and offered to answer
questions related to SB 121.
SENATOR COGHILL asked if the Department of Law has had to take
action to protect minors from financial fraud or identity theft.
MS. WILLIAMS replied the Department of Law hasn't seen a lot of
cases of child ID theft, but the potential is there and some
consumers have expressed interest in extending credit freeze
protection to minors.
SENATOR COGHILL asked how families become aware of the issue.
MS. WILLIAMS explained that the companies that have experienced
a data breach generally do wide-spread notification, as required
by law. If the stolen information is used to engage in identity
theft, people might not know right away and a minor might not
know until they are older and apply for credit.
SENATOR COGHILL asked if there has been difficulty holding
people accountable to the requirements in Alaska law relating to
data breaches.
MS. WILLIAMS offered her understanding that consumers have been
notified accordingly, particularly in the instances of the
larger data breaches.
1:46:23 PM
CHAIR MCGUIRE asked if Alaska law protects people who are
intellectually challenged or have a mental health issue and are
moving into conservatorship status.
MS. MORLEDGE reported that a legally appointed guardian or
conservator of an incapacitated individual already has the
ability to place a credit freeze for that individual.
CHAIR MCGUIRE read the final paragraph of the 10/8/2015 memo
from Megan A. Wallace that accompanied the work order for the
bill.
Please be advised, however, that the bill may be
construed to give parents and/or minors greater
protection than is provided to other adult consumers,
to the extent that credit agencies are not required to
generate a report for adult consumers who may not have
any credit history. In this regard, please advise if
you wish to include a provision that would require
credit agencies to generate a credit report for all
consumers who may not already have a credit report for
the purpose of placing a security freeze.
She asked if the sponsor saw and considered it.
MS. MORLEDGE replied they did see it and decided to maintain the
focus on minors and others who may have a guardian, because it
wouldn't be difficult for an adult to do that for him/herself.
However, the sponsor would be open to the discussion.
CHAIR MCGUIRE said she'd give members an opportunity to consider
the matter.
SENATOR COGHILL noted that the credit reports include a process
for placing a credit freeze.
CHAIR MCGUIRE commented it might be an outlier circumstance, but
it might be worth considering.
1:50:51 PM
CHAIR MCGUIRE closed public testimony and held SB 121 in
committee for further consideration.