HB4813 96TH GENERAL ASSEMBLY

LRB096 16088 DRJ 31671 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB4813

Introduced 1/12/2010, by Rep. Jim Sacia

SYNOPSIS AS INTRODUCED:

815 ILCS 505/2MM

Amends the Consumer Fraud and Deceptive Business Practices Act. Provides that a consumer reporting agency shall remove a security freeze on a consumer's credit report no later than 15 minutes after receiving a request from the consumer (i) through a secure electronic mail connection provided by the consumer reporting agency or (ii) by telephone, through the Internet, or, if provided by the consumer reporting agency, through other electronic media. Sets forth various circumstances under which a consumer reporting agency is not required to comply with a consumer's request within the 15-minute time frame, including the consumer's failure to provide proper identification, a natural disaster, operational interruptions, governmental actions, and computer maintenance. Effective immediately.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Consumer Fraud and Deceptive Business Practices Act is amended by changing Section 2MM as follows:

(815 ILCS 505/2MM)

Sec. 2MM. Verification of accuracy of consumer reporting information used to extend consumers credit and security freeze on credit reports.

(a) A credit card issuer who mails an offer or solicitation to apply for a credit card and who receives a completed application in response to the offer or solicitation which lists an address that is not substantially the same as the address on the offer or solicitation may not issue a credit card based on that application until reasonable steps have been taken to verify the applicant's change of address.

(b) Any person who uses a consumer credit report in connection with the approval of credit based on the application for an extension of credit, and who has received notification of a police report filed with a consumer reporting agency that the applicant has been a victim of financial identity theft, as defined in Section 16G-15 of the Criminal Code of 1961, may not lend money or extend credit without taking reasonable steps to verify the consumer's identity and confirm that the application for an extension of credit is not the result of financial identity theft.

(c) A consumer may request that a security freeze be placed on his or her credit report by sending a request in writing by certified mail to a consumer reporting agency at an address designated by the consumer reporting agency to receive such requests. This subsection (c) does not prevent a consumer reporting agency from advising a third party that a security freeze is in effect with respect to the consumer's credit report.

(d) A consumer reporting agency shall place a security freeze on a consumer's credit report no later than 5 business days after receiving a written request from the consumer:

(1) a written request described in subsection (c);

(2) proper identification; and

(3) payment of a fee, if applicable.

(d-5) A consumer reporting agency shall remove a security freeze on a consumer's credit report no later than 15 minutes after receiving a request from the consumer (i) through a secure electronic mail connection provided by the consumer reporting agency or (ii) by telephone, through the Internet, or, if provided by the consumer reporting agency, through other electronic media. A consumer reporting agency is not required to comply with a consumer's request within the 15-minute time frame, however, if:

(1) the consumer does not provide proper identification; or

(2) the consumer reporting agency's ability to comply with the request within the 15-minute time frame is prevented by any of the following:

(A) An act of God, including fire, an earthquake, a hurricane, a storm, or a similar natural disaster or phenomenon.

(B) Unauthorized or illegal acts by a third party, including terrorism, sabotage, riot, vandalism, labor strikes or disputes disrupting operations, or similar occurrences.

(C) An operational interruption, including an electrical failure, an unanticipated delay in the delivery of equipment or replacement parts, computer hardware or software failures inhibiting response time, or similar disruptions.

(D) A governmental action, including an emergency order or regulation, a judicial action, a law enforcement action, or a similar directive.

(E) Regularly scheduled maintenance of, or updates to, the consumer reporting agency's computer systems, if the maintenance activities or updates occur other than during normal business hours.

(F) Commercially reasonable maintenance of, or repairs to, the consumer reporting agency's computer systems, if the maintenance activities or repairs are unexpected or are necessitated by unanticipated conditions or malfunctions.

(G) For a request made by telephone, receipt of a request under this subsection (d-5) other than during the consumer reporting agency's normal business hours, including any extended business hours observed by the consumer reporting agency. The exemption provided by this subparagraph (G) does not apply to a request made by a consumer through the Internet or other electronic media. A consumer reporting agency must comply with a request made by a consumer through the Internet or other electronic media within the 15-minute time frame set forth in this subsection (d-5), even if the request is made at a time other than during the consumer reporting agency's normal or extended business hours.

(e) Upon placing the security freeze on the consumer's credit report, the consumer reporting agency shall send to the consumer within 10 business days a written confirmation of the placement of the security freeze and a unique personal identification number or password or similar device, other than the consumer's Social Security number, to be used by the consumer when providing authorization for the release of his or her credit report for a specific party or period of time.

(f) If the consumer wishes to allow his or her credit report to be accessed for a specific party or period of time while a freeze is in place, he or she shall contact the consumer reporting agency using a point of contact designated by the consumer reporting agency, request that the freeze be temporarily lifted, and provide the following:

(1) Proper identification;

(2) The unique personal identification number or password or similar device provided by the consumer reporting agency;

(3) The proper information regarding the third party or time period for which the report shall be available to users of the credit report; and

(4) A fee, if applicable.

(g) A consumer reporting agency shall develop a contact method to receive and process a request from a consumer to temporarily lift a freeze on a credit report pursuant to subsection (f) in an expedited manner.

A contact method under this subsection shall include: (i) a postal address; and (ii) an electronic contact method chosen by the consumer reporting agency, which may include the use of telephone, fax, Internet, or other electronic means.

(h) A consumer reporting agency that receives a request from a consumer to temporarily lift a freeze on a credit report pursuant to subsection (f), shall comply with the request no later than 3 business days after receiving the request.

(i) A consumer reporting agency shall remove or temporarily lift a freeze placed on a consumer's credit report only in the following cases:

(1) upon consumer request, pursuant to subsection (f) or subsection (l) of this Section; or

(2) if the consumer's credit report was frozen due to a material misrepresentation of fact by the consumer.

If a consumer reporting agency intends to remove a freeze upon a consumer's credit report pursuant to this subsection, the consumer reporting agency shall notify the consumer in writing prior to removing the freeze on the consumer's credit report.

(j) If a third party requests access to a credit report on which a security freeze is in effect, and this request is in connection with an application for credit or any other use, and the consumer does not allow his or her credit report to be accessed for that specific party or period of time, the third party may treat the application as incomplete.

(k) If a consumer requests a security freeze, the credit reporting agency shall disclose to the consumer the process of placing and temporarily lifting a security freeze, and the process for allowing access to information from the consumer's credit report for a specific party or period of time while the freeze is in place.

(l) A security freeze shall remain in place until the consumer requests, using a point of contact designated by the consumer reporting agency, that the security freeze be removed. A credit reporting agency shall remove a security freeze within 3 business days of receiving a request for removal from the consumer, who provides:

(1) Proper identification;

(2) The unique personal identification number or password or similar device provided by the consumer reporting agency; and

(3) A fee, if applicable.

(m) A consumer reporting agency shall require proper identification of the person making a request to place or remove a security freeze.

(n) The provisions of subsections (c) through (m) of this Section do not apply to the use of a consumer credit report by any of the following:

(1) A person or entity, or a subsidiary, affiliate, or agent of that person or entity, or an assignee of a financial obligation owing by the consumer to that person or entity, or a prospective assignee of a financial obligation owing by the consumer to that person or entity in conjunction with the proposed purchase of the financial obligation, with which the consumer has or had prior to assignment an account or contract, including a demand deposit account, or to whom the consumer issued a negotiable instrument, for the purposes of reviewing the account or collecting the financial obligation owing for the account, contract, or negotiable instrument. For purposes of this subsection, "reviewing the account" includes activities related to account maintenance, monitoring, credit line increases, and account upgrades and enhancements.

(2) A subsidiary, affiliate, agent, assignee, or prospective assignee of a person to whom access has been granted under subsection (f) of this Section for purposes of facilitating the extension of credit or other permissible use.

(3) Any state or local agency, law enforcement agency, trial court, or private collection agency acting pursuant to a court order, warrant, or subpoena.

(4) A child support agency acting pursuant to Title IV-D of the Social Security Act.

(5) The State or its agents or assigns acting to investigate fraud.

(6) The Department of Revenue or its agents or assigns acting to investigate or collect delinquent taxes or unpaid court orders or to fulfill any of its other statutory responsibilities.

(7) The use of credit information for the purposes of prescreening as provided for by the federal Fair Credit Reporting Act.

(8) Any person or entity administering a credit file monitoring subscription or similar service to which the consumer has subscribed.

(9) Any person or entity for the purpose of providing a consumer with a copy of his or her credit report or score upon the consumer's request.

(10) Any person using the information in connection with the underwriting of insurance.

(n-5) This Section does not prevent a consumer reporting agency from charging a fee of no more than $10 to a consumer for each freeze, removal, or temporary lift of the freeze, regarding access to a consumer credit report, except that a consumer reporting agency may not charge a fee to (i) a consumer 65 years of age or over for placement and removal of a freeze, or (ii) a victim of identity theft who has submitted to the consumer reporting agency a valid copy of a police report, investigative report, or complaint that the consumer has filed with a law enforcement agency about unlawful use of his or her personal information by another person.

(o) If a security freeze is in place, a consumer reporting agency shall not change any of the following official information in a credit report without sending a written confirmation of the change to the consumer within 30 days of the change being posted to the consumer's file: (i) name, (ii) date of birth, (iii) Social Security number, and (iv) address. Written confirmation is not required for technical modifications of a consumer's official information, including name and street abbreviations, complete spellings, or transposition of numbers or letters. In the case of an address change, the written confirmation shall be sent to both the new address and to the former address.

(p) The following entities are not required to place a security freeze in a consumer report, however, pursuant to paragraph (3) of this subsection, a consumer reporting agency acting as a reseller shall honor any security freeze placed on a consumer credit report by another consumer reporting agency:

(1) A check services or fraud prevention services company, which issues reports on incidents of fraud or authorizations for the purpose of approving or processing negotiable instruments, electronic funds transfers, or similar methods of payment.

(2) A deposit account information service company, which issues reports regarding account closures due to fraud, substantial overdrafts, ATM abuse, or similar negative information regarding a consumer to inquiring banks or other financial institutions for use only in reviewing a consumer request for a deposit account at the inquiring bank or financial institution.

(3) A consumer reporting agency that:

(A) acts only to resell credit information by assembling and merging information contained in a database of one or more consumer reporting agencies; and

(B) does not maintain a permanent database of credit information from which new credit reports are produced.

(q) For purposes of this Section:

"Credit report" has the same meaning as "consumer report", as ascribed to it in 15 U.S.C. Sec. 1681a(d).

"Consumer reporting agency" has the meaning ascribed to it in 15 U.S.C. Sec. 1681a(f).

"Security freeze" means a notice placed in a consumer's credit report, at the request of the consumer and subject to certain exceptions, that prohibits the consumer reporting agency from releasing the consumer's credit report or score relating to an extension of credit, without the express authorization of the consumer.

"Extension of credit" does not include an increase in an existing open-end credit plan, as defined in Regulation Z of the Federal Reserve System (12 C.F.R. 226.2), or any change to or review of an existing credit account.

"Proper identification" means information generally deemed sufficient to identify a person. Only if the consumer is unable to reasonably identify himself or herself with the information described above, may a consumer reporting agency require additional information concerning the consumer's employment and personal or family history in order to verify his or her identity.

(r) Any person who violates this Section commits an unlawful practice within the meaning of this Act.

(Source: P.A. 94-74, eff. 1-1-06; 94-799, eff. 1-1-07; 95-331, eff. 8-21-07.)

Section 99. Effective date. This Act takes effect upon becoming law.