Legislature(2003 - 2004)
04/16/2003 01:00 PM Senate JUD
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SB 64-CREDIT INFORMATION
SENATOR HOLLIS FRENCH, sponsor of SB 64, explained to members
that SB 64 is aimed at stemming the growth of identify theft,
which is one of the fastest growing crimes in America. It is
believed that more than 750,000 people may be victims of
identity theft each year and each will spend many hours and
typically, more than $1,000 to repair the damage done to his or
her reputation and finances. Victims of identity theft continue
to be turned down for loans, credit and for jobs long after the
initial damage. They are victims, but are often made to feel
guilty. The first indication many people have that they have
been victimized is when credit problems surface. Regularly
reviewing one's own credit report is an easy way to stop
identity theft in the early stages. Providing Alaskan consumers
with one free credit report a year will not only help consumers,
but also the many businesses that extend credit. Minimizing
losses to the business community through identity theft is one
aim of this legislation.
SENATOR FRENCH said businesses inspect consumer credit histories
when they evaluate applications for credit, insurance,
employment and even leases. An individual's credit history is
recorded in files maintained by credit reporting agencies that
sell those reports. A credit report often contains information
about a person's income, debts, credit and payment history, and
it also indicates whether a person has been sued, arrested or
filed for bankruptcy. If that information is incorrect, the
consumer can suffer. SB 64 will require consumer-reporting
agencies that maintain files on Alaskans to provide an Alaskan
with one free copy of his or her file once a year if requested.
The report would include all consumer and credit reports. Six
other states have taken similar strong action to help consumers
protect and correct their credit ratings.
SENATOR THERRIAULT moved to adopt Amendment 1 and asked Senator
French to address the proposed amendment.
SENATOR FRENCH told members the amendment was drafted after he
spoke with Chair Seekins about his concern that businesses that
extend credit might somehow become responsible for notifying
customers of this right. He said that is not the aim of the
legislation. The purpose is to enable Alaskans to contact the
three big credit-reporting agencies and tell them that under
Alaska law they are entitled to one free credit report each
year.
CHAIR SEEKINS said it is not uncommon for businesses to have to
prove that they gave notice to consumers. He said if someone
came to his dealership and applied for credit from the Ford
Motor Credit Company, he might be required to notify that person
of his or her right and if he did not do so, he could be subject
to penalty. The objective of the amendment is to make sure that
someone in the business of providing a loan is not required to
notify the applicant of this particular right.
SENATOR THERRIAULT again moved to adopt Amendment 1.
CHAIR SEEKINS announced that without objection, Amendment 1 was
adopted.
SENATOR FRENCH said in his experience, states with similar laws
post this consumer right on their state websites.
CHAIR SEEKINS said he has found that credit-reporting agencies
do not necessarily object to having to provide one free report.
They see it as a marketing opportunity for their reporting
services.
SENATOR FRENCH said that is a valid point because credit-
reporting agencies frequently market one free credit report as a
come-on to certain individuals. His take is that when people see
something offered for free on a website, they know there is a
hitch.
CHAIR SEEKINS said they should know that, but many people do not
make that connection. He said he is not arguing against the
bill, he is just saying those people that take advantage of it
should expect to be targeted for additional solicitations. He
then took public testimony.
MR. STEVE CLEARY from the Alaska Public Interest Research Group
(AkPIRG) said this bill would provide one more tool for
individuals to manage their own credit. It also puts the
responsibility for maintaining your own file on the consumer. He
said identity theft is on the increase, especially among the
elderly and AARP and similar organizations will be excited about
this bill.
CHAIR SEEKINS said he would be careful about advising people
that one credit check per year will prevent them from having
their identity stolen.
MR. SAM TRIVETT said that SB 64 is an excellent consumer
protection bill. He is the president of the Retired Public
Employees Association and although he is not representing that
association today he is aware that identify theft is a big issue
for older people. SB 64 will encourage citizens to do checks. He
found he had several credit cards listed on his report from
stores that had been out of business for many years. He said a
credit check is beneficial for citizens and businesses. He urged
members to support the bill.
MS. MARIE DARLIN, coordinator of the Capital City Task Force for
AARP, said AARP members have been interested in this legislation
since it was introduced because many older citizens have
problems with their credit reports. This legislation will
provide an opportunity to urge people to get their credit
checked. She asked if there is any way to put AARP members on a
"do not call" list regarding solicitations.
CHAIR SEEKINS said AARP would have to research that question.
MS. DARLIN said that AARP supports SB 64.
SENATOR THERRIAULT said he does not believe this will have an
impact on whether a person would be able to block unsolicited
phone calls selling that service. They would probably receive
solicitations in the mail.
SENATOR ELLIS pointed out that Ms. Darlin was referencing
another piece of legislation that addresses the "do not call"
issue.
CHAIR SEEKINS encouraged Ms. Darlin to inform people that the
marketing aspect will come into play if this bill passes. There
being no one else wishing to testify, he closed public
testimony.
2:10 p.m.
SENATOR OGAN expressed concern that SB 64 is an unfunded mandate
on private business.
CHAIR SEEKINS said he investigated that question and found that
the credit reporting agencies do not have any problem with this
legislation because they see it as a marketing opportunity to
try to get people to purchase regular reporting services.
SENATOR FRENCH said federal law requires free credit reports to
people who have been unemployed for a certain length of time, if
there has been a denial of credit or if other specific actions
might arise to question the status of one's credit. Many states
have taken the next step to mandate that consumers be given one
free check per year, primarily because of the enormous power
these companies have over people in the realm of credit
granting.
CHAIR SEEKINS said the influence of incorrect information on
one's credit report can be very negative.
SENATOR ELLIS said this legislation seems like a win-win
situation for everyone. If this required Alaskan businesses to
pay for something to help out consumers, he would be concerned
about it being an unfunded mandate.
CHAIR SEEKINS said he came to that same conclusion.
SENATOR OGAN said if the three credit-reporting companies think
it is a great thing, he would like to hear from them.
CHAIR SEEKINS said they are international companies. Right now,
a person can get a credit report on the Internet at no cost, but
those companies can then solicit that person for other services.
This bill basically codifies something those companies are
already doing on their own websites.
SENATOR OGAN asked if this legislation allows those companies to
market Alaskan consumers.
CHAIR SEEKINS said the Legislature cannot stop them without more
legislation. He said he does not like to force anyone to do
something by law unless there is an overriding public purpose.
He is willing to give this legislation the benefit of that
doubt.
SENATOR THERRIAULT moved CSSB 64(JUD) from committee with
individual recommendations and the attached fiscal notes.
CHAIR SEEKINS announced that without objection, the motion
carried. He then announced a brief at-ease.
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