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.