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S. 423
STATUS INFORMATION
General Bill
Sponsors: Senator Sheheen
Document Path: l:\council\bills\bbm\10583mm05.doc
Introduced in the Senate on February 8, 2005
Currently residing in the Senate Committee on Banking and Insurance
Summary: Consumer Report Security Freeze Act
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number
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2/8/2005 Senate Introduced and read first time SJ-13
2/8/2005 Senate Referred to Committee on Banking and Insurance SJ-13
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING PART 5 TO CHAPTER 5, TITLE 37 SO AS TO ENACT THE SOUTH CAROLINA CONSUMER REPORT SECURITY FREEZE ACT, PROVIDING FOR A FREEZE ON THE RELEASE OF A CONSUMER FILE BY A CONSUMER CREDIT REPORTING AGENCY UPON THE REQUEST OF A CONSUMER WHO IS THE VICTIM OF IDENTITY THEFT, PROCEDURES FOR IMPLEMENTING AND REMOVING THE FREEZE, APPLICABILITY OF AND EXEMPTIONS FROM THE FREEZE, AND PENALTIES FOR VIOLATION OF THESE PROVISIONS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Chapter 5 of Title 37 of the 1976 Code is amended by adding:
Section 37-5-501. This part may be cited as the 'South Carolina Consumer Report Security Freeze Act'.
Section 37-5-502. As used in this part:
(1) 'Consumer' means a natural person residing in the State of South Carolina who undertakes a transaction for personal, family, or household purposes.
(2)(a) 'Consumer report' means any written, oral, electronic, or other communication or information by a consumer credit-reporting agency regarding a consumer's creditworthiness, credit standing, credit capacity, debts, character, general reputation, personal characteristics, or mode of living that is used or expected to be used or collected, in whole or in part, for employment purposes, for the purpose of establishing a consumer's eligibility for consumer credit or consumer insurance, or for another purpose authorized pursuant to the federal 'Fair Credit Reporting Act'.
(b) 'Consumer report' does not include:
( i) a report containing information as to a transaction between the consumer and the person making the report;
( ii) an authorization or approval by the issuer of a credit card or similar device, directly or indirectly, of a specific extension of credit; or
(iii) a report in which a person conveys an adverse decision in response to a request from a third party to make a specific extension of credit, directly or indirectly, to the consumer, if the third party advises the consumer of the name and address of the person to whom the request was made and the person makes the required disclosures to the consumer pursuant to the provisions of the federal 'Fair Credit Reporting Act'.
(3)(a) 'Consumer credit-reporting agency' means a person who, for monetary fees or dues or on a cooperative nonprofit basis, regularly engages in the practice of assembling or evaluating consumer credit information or other information about consumers for the purpose of furnishing consumer reports to third parties.
(b) 'Consumer credit-reporting agency' does not include a business entity that provides only check verification or check guarantee services.
(4) 'File' means all information on a consumer that is recorded and retained by a consumer credit-reporting agency, regardless of how the information is stored.
(5) 'Financial identity fraud' is as defined in Section 16-13-510.
(6) 'Person' means a natural person, firm, corporation, or partnership.
(7) 'Security freeze' means a notice placed on a consumer file which prohibits a consumer reporting agency from releasing a consumer report relating to the extension of credit involving that consumer file without the express authorization of the consumer.
Section 37-5-503. (A) On written request sent by certified mail that includes proper identification provided by a consumer who has reason to believe that he is the victim of financial identity fraud, as evidenced by a copy of a valid police report, investigative report, or complaint made pursuant to Section 16-13-510, a consumer reporting agency shall place a security freeze on the consumer's consumer file not later than the fifth business day after the date the agency receives the request.
(B) On written request for a security freeze from a consumer pursuant to subsection (A), a consumer reporting agency shall disclose to the consumer the process of placing, removing, and temporarily lifting a security freeze and the process for allowing access to information from the consumer's consumer file for a specific requester or period while the security freeze is in effect.
(C) A consumer reporting agency, not later than the tenth business day after the date the agency receives the request for a security freeze shall:
(1) send a written confirmation of the security freeze to the consumer; and
(2) provide the consumer with a unique personal identification number or password to be used by the consumer to authorize a removal or temporary lifting of the security freeze.
(D) A consumer may request in writing a replacement personal identification number or password. The request must comply with the requirements for requesting a security freeze pursuant to subsection (A). The consumer reporting agency, not later than the third business day after the date the agency receives the request for a replacement personal identification number or password, shall provide the consumer with a new unique personal identification number or password to be used by the consumer instead of the number or password that was provided earlier.
Section 37-5-504. If a security freeze is in place, a consumer reporting agency shall notify the consumer in writing of a change in the consumer file to the consumer's name, date of birth, social security number, or address not later than thirty calendar days after the date the change is made. The agency shall send notification of a change of address to the new address and former address. This section does not require notice of an immaterial change, including a street abbreviation change or correction of a transposition of letters or misspelling of a word.
Section 37-5-505. A consumer reporting agency shall notify a person who requests a consumer report if a security freeze is in effect for the consumer file involved in that report and the consumer report may not be released without express authorization by the consumer.
Section 37-5-506. (A) On a request in writing or by telephone and with proper identification provided by a consumer, including the consumer's personal identification number or password provided pursuant to Section 37-5-503, a consumer reporting agency shall remove a security freeze not later than the third business day after the date the agency receives the request.
(B) On a request in writing or by telephone and with proper identification provided by a consumer, including the consumer's personal identification number or password provided pursuant to Section 37-5-503, a consumer reporting agency, not later than the third business day after the date the agency receives the request, shall temporarily lift the security freeze for:
(1) a certain properly designated period; or
(2) a certain properly identified requester.
(C) A consumer reporting agency may develop procedures involving the use of a telephone, a facsimile machine, the Internet, or another electronic medium to receive and process a request from a consumer pursuant to this section.
(D) A consumer reporting agency shall remove a security freeze placed on a consumer file if the security freeze was placed due to a material misrepresentation of fact by the consumer. The consumer reporting agency shall notify the consumer in writing before removing the security freeze pursuant to this subsection.
(E) A consumer reporting agency may not charge a fee for a request pursuant to subsections (A) or (B).
Section 37-5-507. A security freeze does not apply to a consumer report provided to:
(1) a state or local governmental entity, including a law enforcement agency or court or private collection agency, if the entity, agency, or court is acting pursuant to a court order, warrant, subpoena, or administrative subpoena;
(2) a child support agency acting to investigate or collect child support payments or acting pursuant to Title IV-D of the Social Security Act (42 U.S.C. Section 651 et seq.);
(3) the Department of Social Services acting to investigate fraud;
(4) the Department of Revenue acting to investigate or collect delinquent state taxes;
(5) a local official authorized to investigate or collect delinquent ad valorem taxes;
(6) a person for the purposes of prescreening as provided by the Fair Credit Reporting Act (15 U.S.C. Section 1681 et seq.), as amended;
(7) a person with whom the consumer has an account or contract or to whom the consumer has issued a negotiable instrument, or the person's subsidiary, affiliate, agent, assignee, prospective assignee, or private collection agency, for purposes related to that account, contract, or instrument;
(8) a subsidiary, affiliate, agent, assignee, or prospective assignee of a person to whom access has been granted pursuant to Section 37-5-506(B);
(9) a person who administers a credit file monitoring subscription service to which the consumer has subscribed;
(10) a person for the purpose of providing a consumer with a copy of the consumer's report on the consumer's request; or
(11) a consumer reporting agency that:
(a) acts only to resell credit information by assembling and merging information contained in a database of another consumer reporting agency or multiple consumer reporting agencies; and
(b) does not maintain a permanent database of credit information from which new consumer reports are produced.
Section 37-5-508. The requirement of this part to place a security freeze on a consumer file does not apply to:
(1) a check service or fraud prevention service company that issues consumer reports:
(a) to prevent or investigate fraud; or
(b) for purposes of approving or processing negotiable instruments, electronic funds transfers, or similar methods of payment; or
(2) a deposit account information service company that issues consumer reports related to account closures caused by fraud, substantial overdrafts, automated teller machine abuses, or similar negative information regarding a consumer to an inquiring financial institution for use by the financial institution only in reviewing a consumer request for a deposit account with that institution.
Section 37-5-509. A consumer reporting agency shall honor a security freeze placed on a consumer file by another consumer reporting agency.
Section 37-5-510. (A) A consumer credit-reporting agency that wilfully violates a provision of this part is liable for three times the amount of actual damages or one thousand dollars for each incident, whichever is greater, as well as reasonable attorney's fees and costs.
(B) A consumer credit-reporting agency that negligently violates this part is liable for the greater of actual damages or one thousand dollars for each incident, as well as reasonable attorney's fees and costs.
(C) In addition to the damages assessed pursuant to subsections (A) and (B), if the injury is to the consumer's creditworthiness, credit standing, credit capacity, character, general reputation, employment options, or eligibility for insurance, and results from the failure to place and enforce the security freeze and the failure is not corrected by the consumer credit-reporting agency within ten days after the entry of a judgment for damages, the assessed damages must be increased to one thousand dollars each day until the security freeze is imposed.
Section 37-5-511. The provisions of this part are cumulative, and an action taken pursuant to this part is not an election to take that action to the exclusion of other action authorized by law."
SECTION 2. The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION 3. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this chapter and this part, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION 4. This act takes effect upon approval by the Governor.
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