BILL NUMBER: AB 655 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 3, 2001
AMENDED IN ASSEMBLY APRIL 17, 2001
INTRODUCED BY Assembly Member Wright
FEBRUARY 22, 2001
An act to amend Sections 1785.10, 1785.16, 1786, 1786.2, 1786.10,
1786.11, 1786.16, 1786.18, 1786.20, 1786.24, 1786.26, 1786.28,
1786.50, and 1786.52 of, to add Sections 1785.11.5, 1785.16.1,
1785.20.3, 1786.29, 1786.53, and 1788.4 to, to add Title 1.81A
(commencing with Section 1798.90) to Part 4 of Division 3 of, and to
repeal Article 3 (commencing with Section 1786.40) of Title 1.6A of
Part 4 of Division 3 of, the Civil Code, relating to personal
identifying information.
LEGISLATIVE COUNSEL'S DIGEST
AB 655, as amended, Wright. Personal identifying information:
identity theft.
Existing law requires consumer credit report agencies to allow a
consumer to elect to have his or her name removed from any list
provided by the consumer credit reporting agencies for firm offers of
credit that are not initiated by the consumer, as specified.
This bill would permit a consumer to specify, either verbally or
in writing, that his or her name shall be removed from lists that a
consumer credit reporting agency furnishes for credit card
solicitations for a minimum of two years, and that consumer credit
reporting agencies would be required to inform a consumer of this
option, as specified.
Existing law provides a process by which a consumer may dispute
the accuracy of information in a consumer credit report. Existing
law requires a consumer credit reporting agency to promptly and
permanently block certain information when a consumer provides a
valid copy of a police report indicating that another person has
unlawfully used the consumer's personal identifying information.
This bill would require a consumer credit reporting agency
additionally to promptly and permanently block certain information
when a consumer provides a valid copy of a Department of Motor
Vehicles investigative report indicating that another person has
unlawfully used the consumer's personal identifying information. The
bill would set forth requirements regarding the unblocking of
certain information by a consumer reporting agency after an
allegation of identity theft by a consumer, and would permit a
consumer reporting agency to disregard a consumer's version of
disputed information, as specified. This bill would also require
that a consumer credit reporting agency delete from a consumer credit
report inquiries for credit reports that were initiated as the
result of identity theft.
Existing law places certain requirements on users of consumer
credit reports, including the right of the consumer to prohibit the
use of information in a consumer's files in connection with credit
transactions not initiated by the consumer.
This bill would require any person who uses a consumer credit
report in connection with a credit transaction and who discovers that
the address on the consumer credit report does not match the address
of the consumer requesting or being offered credit to take
reasonable steps to verify the accuracy of the consumer's address, as
specified, and confirm that the credit transaction is not the result
of defined identity theft. This bill would create similar
requirements for any person who uses a consumer credit report in
connection with a credit transaction and who receives specified
notification from a consumer credit reporting agency that
information in the report has been blocked as the result of an
identity theft. This bill would provide that a consumer damaged by a
failure to fulfill the above described requirements would have a
claim against the person using the report, as specified.
Existing law restricts the dissemination of certain types of
personal identifying information by specific professions and
businesses. Existing law also provides, generally, that a consumer
is not liable on debt incurred by a 3rd party, and limits a consumer'
s liability on the unauthorized use of a credit card, as defined.
This bill would allow a person to bring a cause of action against
a claimant to establish that the person is a victim of identity
theft, as defined; or if the claimant has brought a cause of action
to recover on its claim, the bill would allow the person to file a
cross complaint to establish that the person is a victim of identity
theft in connection with the claim. This bill would allow the victim
to obtain a judgment that, among other things, declares the victim is
not obligated on these claims, that declares void any security
interests in the victim's property, that provides for an injunction
restraining attempts to collect on these claims, that may include
actual damages and equitable relief as the court deems appropriate,
that may include a civil penalty up to $30,000 and that awards
reasonable attorney's fees and costs. This bill would allow the
victim to join any person purporting to have a claim that the victim
maintains arises from identity theft in the action regardless of
whether those claims arise out of the same transaction or occurrence.
The bill would also provide for continuing jurisdiction in these
actions and the limitation on bringing actions or joining defendants
with respect to the action.
Existing law regulates the activities of investigative consumer
reporting agencies, as specified.
This bill would revise and recast various provisions governing the
activities of investigative consumer reporting agencies. Among
other things, it would expand the definition of "investigative
consumer reporting agency," increase disclosure requirements,
eliminate certain exemptions, increase penalties for violations, and
would make related changes.
The bill would prohibit creditors from selling a consumer debt to
a debt collector , except as specified, if the consumer's
file with a consumer credit reporting agency is blocked or the
creditor has reason to believe the consumer is a victim of identity
theft. The bill would also prohibit persons who gather specified
information on a consumer in lieu of using the services of an
investigative consumer reporting agency to provide that information
to the consumer.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1785.10 of the Civil Code is amended to read:
1785.10. (a) Every consumer credit reporting agency shall, upon
request and proper identification of any consumer, allow the consumer
to visually inspect all files maintained regarding that consumer at
the time of the request.
(b) Every consumer reporting agency, upon contact by a consumer by
telephone, mail, or in person regarding information which may be
contained in the agency files regarding that consumer, shall promptly
advise the consumer of his or her rights under Sections 1785.11.5,
1785.19 and 1785.19.5, and of the obligation of the agency to provide
disclosure of the files in person, by mail, or by telephone pursuant
to Section 1785.15, including the obligation of the agency to
provide a decoded written version of the file or a written copy of
the file with an explanation of any code, including any credit score
used, and the key factors, as defined in Section 1785.15.1, if the
consumer so requests that copy. The disclosure shall be provided in
the manner selected by the consumer, chosen from among any reasonable
means available to the consumer credit reporting agency.
The agency shall determine the applicability of subdivision (1) of
Section 1785.17 and, where applicable, the agency shall inform the
consumer of the rights under that section.
(c) All information on a consumer in the files of a consumer
credit reporting agency at the time of a request for inspection under
subdivision (a), shall be available for inspection, including the
names and addresses of the sources of information.
(d) (1) The consumer credit reporting agency shall also disclose
the recipients of any consumer credit report on the consumer which
the consumer credit reporting agency has furnished:
(A) For employment purposes within the two-year period preceding
the request.
(B) For any other purpose within the 12-month period preceding the
request.
(2) Disclosure of recipients of consumer credit reports for
purposes of this subdivision shall include the name of the recipient
or, if applicable, the fictitious business name under which the
recipient does business disclosed in full. If requested by the
consumer, the identification shall also include the address of the
recipient.
(e) The consumer credit reporting agency shall also disclose a
record of all inquiries received by the agency in the 12-month period
preceding the request that identified the consumer in connection
with a credit transaction which is not initiated by the consumer.
This record of inquiries shall include the name of each recipient
making an inquiry.
SEC. 2. Section 1785.11.5 is added to the Civil Code, to read:
1785.11.5. A consumer may elect that his or her name shall be
removed from any list that a consumer credit reporting agency
furnishes for credit card solicitations, by notifying the consumer
credit reporting agency, by telephone or in writing, pursuant to the
notification system maintained by the consumer credit reporting
agency pursuant to subdivision (d) of Section 1785.11. The election
shall be effective for a minimum of two years, unless otherwise
specified by the consumer.
SEC. 3. Section 1785.16 of the Civil Code is amended to read:
1785.16. (a) If the completeness or accuracy of any item of
information contained in his or her file is disputed by a consumer,
and the dispute is conveyed directly to the consumer credit reporting
agency by the consumer or user on behalf of the consumer, the
consumer credit reporting agency shall within a reasonable period of
time and without charge, reinvestigate and record the current status
of the disputed information before the end of the 30-business-day
period beginning on the date the agency receives notice of the
dispute from the consumer or user, unless the consumer credit
reporting agency has reasonable grounds to believe and determines
that the dispute by the consumer is frivolous or irrelevant,
including by reason of a failure of the consumer to provide
sufficient information, as requested by the consumer credit reporting
agency, to investigate the dispute. Unless the consumer credit
reporting agency determines that the dispute is frivolous or
irrelevant, before the end of the five-business-day period beginning
on the date the consumer credit reporting agency receives notice of
dispute under this section, the agency shall notify any person who
provided information in dispute at the address and in the manner
specified by the person. A consumer credit reporting agency may
require that disputes by consumers be in writing.
(b) In conducting that reinvestigation the consumer credit
reporting agency shall review and consider all relevant information
submitted by the consumer with respect to the disputed item of
information. If the consumer credit reporting agency determines that
the dispute is frivolous or irrelevant, it shall notify the consumer
by mail or, if authorized by the consumer for that purpose, by any
other means available to the consumer credit reporting agency, within
five business days after that determination is made that it is
terminating its reinvestigation of the item of information. In this
notification, the consumer credit reporting agency shall state the
specific reasons why it has determined that the consumer's dispute is
frivolous or irrelevant. If the disputed item of information is
found to be inaccurate, missing, or can no longer be verified by the
evidence submitted, the consumer credit reporting agency shall
promptly add, correct, or delete that information from the consumer's
file.
(c) No information may be reinserted in a consumer's file after
having been deleted pursuant to this section unless the person who
furnished the information certifies that the information is accurate.
If any information deleted from a consumer's file is reinserted in
the file, the consumer credit reporting agency shall promptly notify
the consumer of the reinsertion in writing or, if authorized by the
consumer for that purpose, by any other means available to the
consumer credit reporting agency. As part of, or in addition to,
this notice the consumer credit reporting agency shall, within five
business days of reinserting the information, provide the consumer in
writing (1) a statement that the disputed information has been
reinserted, (2) a notice that the agency will provide to the
consumer, within 15 days following a request, the name, address, and
telephone number of any furnisher of information contacted or which
contacted the consumer credit reporting agency in connection with the
reinsertion, (3) the toll-free telephone number of the consumer
credit reporting agency that the consumer can use to obtain this
name, address, and telephone number, and (4) a notice that the
consumer has the right to a reinvestigation of the information
reinserted by the consumer credit reporting agency and to add a
statement to his or her file disputing the accuracy or completeness
of the information.
(d) A consumer credit reporting agency shall provide written
notice to the consumer of the results of any reinvestigation under
this subdivision, within five days of completion of the
reinvestigation. The notice shall include (1) a statement that the
reinvestigation is completed, (2) a consumer credit report that is
based on the consumer's file as that file is revised as a result of
the reinvestigation, (3) a description or indication of any changes
made in the consumer credit report as a result of those revisions to
the consumer's file and a description of any changes made or sought
by the consumer that were not made and an explanation why they were
not made, (4) a notice that, if requested by the consumer, a
description of the procedure used to determine the accuracy and
completeness of the information shall be provided to the consumer by
the consumer credit reporting agency, including the name, business
address, and telephone number of any furnisher of information
contacted in connection with that information, (5) a notice that the
consumer has the right to add a statement to the consumer's file
disputing the accuracy or completeness of the information, (6) a
notice that the consumer has the right to request that the consumer
credit reporting agency furnish notifications under subdivision (h),
(7) a notice that the dispute will remain on file with the agency as
long as the credit information is used, and (8) a statement about the
details of the dispute will be furnished to any recipient as long as
the credit information is retained in the agency's data base. A
consumer credit reporting agency shall provide the notice pursuant to
this subdivision respecting the procedure used to determine the
accuracy and completeness of information, not later than 15 days
after receiving a request from the consumer.
(e) The presence of information in the consumer's file that
contradicts the contention of the consumer shall not, in and of
itself, constitute reasonable grounds for believing the dispute is
frivolous or irrelevant.
(f) If the consumer credit reporting agency determines that the
dispute is frivolous or irrelevant, or if the reinvestigation does
not resolve the dispute, or if the information is reinserted into the
consumer's file pursuant to subdivision (c), the consumer may file a
brief statement setting forth the nature of the dispute. The
consumer credit reporting agency may limit these statements to not
more than 100 words if it provides the consumer with assistance in
writing a clear summary of the dispute.
(g) Whenever a statement of dispute is filed, the consumer credit
reporting agency shall, in any subsequent consumer credit report
containing the information in question, clearly note that the
information is disputed by the consumer and shall include in the
report either the consumer's statement or a clear and accurate
summary thereof.
(h) Following the deletion of information from a consumer's file
pursuant to this section, or following the filing of a statement of
dispute pursuant to subdivision (f), the consumer credit reporting
agency, at the request of the consumer, shall furnish notification
that the item of information has been deleted or that the item of
information is disputed. In the case of disputed information, the
notification shall include the statement or summary of the dispute
filed pursuant to subdivision (f). This notification shall be
furnished to any person designated by the consumer who has, within
two years prior to the deletion or the filing of the dispute,
received a consumer credit report concerning the consumer for
employment purposes, or who has, within 12 months of the deletion or
the filing of the dispute, received a consumer credit report
concerning the consumer for any other purpose, if these consumer
credit reports contained the deleted or disputed information. The
consumer credit reporting agency shall clearly and conspicuously
disclose to the consumer his or her rights to make a request for this
notification. The disclosure shall be made at or prior to the time
the information is deleted pursuant to this section or the consumer's
statement regarding the disputed information is received pursuant to
subdivision (f).
(i) A consumer credit reporting agency shall maintain reasonable
procedures to prevent the reappearance in a consumer's file and in
consumer credit reports of information that has been deleted pursuant
to this section and not reinserted pursuant to subdivision (c).
(j) If the consumer's dispute is resolved by deletion of the
disputed information within three business days, beginning with the
day the consumer credit reporting agency receives notice of the
dispute in accordance with subdivision (a), and provided that
verification thereof is provided to the consumer in writing within
five business days following the deletion, then the consumer credit
reporting agency shall be exempt from requirements for further action
under subdivisions (d), (f), and (g).
(k) If a consumer submits to a credit reporting agency a copy of a
valid police report, or a valid investigative report made by a
Department of Motor Vehicles investigator with peace officer status,
filed pursuant to Section 530.5 of the Penal Code, the consumer
credit reporting agency shall promptly and permanently block
reporting any information that the consumer alleges appears on his or
her credit report as a result of a violation of Section 530.5 of the
Penal Code so that the information cannot be reported. The consumer
credit reporting agency shall promptly notify the furnisher of the
information that the information has been so blocked. Furnishers of
information and consumer credit reporting agencies shall ensure that
information is unblocked only upon a preponderance of the evidence
establishing the facts required under paragraph (1), (2), or (3).
The permanently blocked information shall be unblocked only if: (1)
the information was blocked due to a material misrepresentation of
fact by the consumer or fraud, or (2) the consumer agrees that the
blocked information, or portions of the blocked information, were
blocked in error, or (3) the consumer knowingly obtained possession
of goods, services, or moneys as a result of the blocked transaction
or transactions or the consumer should have known that he or she
obtained possession of goods, services, or moneys as a result of the
blocked transaction or transactions. If blocked information is
unblocked pursuant to this subdivision, the consumer shall be
promptly notified in the same manner as consumers are notified of the
reinsertion of information pursuant to subdivision (c). The prior
presence of the blocked information in the consumer credit reporting
agency's file on the consumer is not evidence of whether the consumer
knew or should have known that he or she obtained possession of any
goods, services, or moneys. For the purposes of this subdivision,
fraud may be demonstrated by circumstantial evidence. In unblocking
information pursuant to this subdivision, furnishers and consumer
credit reporting agencies shall be subject to their respective
requirements pursuant to this title regarding the completeness and
accuracy of information.
(l) In unblocking information as described in subdivision (k), a
consumer reporting agency shall comply with all requirements of this
section and 15 U.S.C. Sec. 1681i relating to reinvestigating disputed
information. In addition, a consumer reporting agency shall accept
the consumer's version of the disputed information and correct or
delete the disputed item when the consumer submits to the consumer
reporting agency documentation obtained from the source of the item
in dispute or from public records confirming that the report was
inaccurate or incomplete, unless the consumer reporting agency, in
the exercise of good faith and reasonable judgment, has substantial
reason based on specific, verifiable facts to doubt the authenticity
of the documentation submitted and notifies the consumer in writing
of that decision, explaining its reasons for unblocking the
information.
(m) Any provision in a contract that prohibits the disclosure of a
credit score by a person who makes or arranges loans or a consumer
credit reporting agency is void. A lender shall not have liability
under any contractual provision for disclosure of a credit score.
SEC. 4. Section 1785.16.1 is added to the Civil Code, to read:
1785.16.1. A consumer credit reporting agency shall delete from a
consumer credit report inquiries for credit reports based upon
credit requests that the consumer credit reporting agency verifies
were initiated as the result of identity theft, as defined in Section
1798.80.
SEC. 5. Section 1785.20.3 is added to the Civil Code, to read:
1785.20.3. (a) Any person who uses a consumer credit report in
connection with a credit transaction, and who discovers that the
address on the consumer credit report does not match the address of
the consumer requesting or being offered credit, shall take
reasonable steps to verify the accuracy of the consumer's address,
and shall call the consumer by telephone and confirm that
the and may, at its option, call the consumer by
telephone or write the consumer to confirm that the credit
transaction is not the result of identity theft, as defined in
Section 1798.90.
(b) Any person who uses a consumer credit report in connection
with a credit transaction, and who receives notification
a clearly identifiable notification, consisting of
more than a tradeline, from a consumer credit reporting agency
that information in the report has been blocked pursuant to 1785.16
as the result of an identity theft, shall not lend money or extend
credit without taking reasonable steps to verify the consumer's
identity and to confirm that the credit transaction is not the result
of identity theft.
(c) Any consumer who suffers damages as a result of a violation of
this section by any person may bring an action in a court of
appropriate jurisdiction against that person to recover actual
damages, court costs, attorney's fees, and punitive damages of not
more than thirty thousand dollars ($30,000) for each violation, as
the court deems proper.
(d) As used in this section, "identity theft" has the meaning
given in Section 1798.90.
SEC. 6. Section 1786 of the Civil Code is amended to read:
1786. The Legislature finds and declares as follows:
(a) Investigative consumer reporting agencies have assumed a vital
role in collecting, assembling, evaluating, compiling, reporting,
transmitting, transferring, or communicating information on consumers
for employment and insurance purposes, and for purposes relating to
the hiring of dwelling units, subpoenas and court orders, licensure,
and other lawful purposes.
(b) There is a need to insure that investigative consumer
reporting agencies exercise their grave responsibilities with
fairness, impartiality, and a respect for the consumer's right to
privacy.
(c) The crime of identity theft in this new computer era has
exploded to become the fastest growing white collar crime in America.
(d) The unique nature of this crime means it can often go
undetected for years without the victim being aware his identity has
been misused.
(e) Because notice of identity theft is critical before the victim
can take steps to stop and prosecute this crime, consumers are best
protected if they are automatically given copies of any investigative
consumer reports made on them.
(f) It is the purpose of this title to require that investigative
consumer reporting agencies adopt reasonable procedures for meeting
the needs of commerce for employment, insurance information, and
information relating to the hiring of dwelling units in a manner
which is fair and equitable to the consumer, with regard to the
confidentiality, accuracy, relevancy, and proper utilization of the
information in accordance with the requirements of this title.
(g) The Legislature hereby intends to regulate investigative
consumer reporting agencies pursuant to this title in a manner which
will best protect the interests of the people of the State of
California.
SEC. 7. Section 1786.2 of the Civil Code is amended to read:
1786.2. The following terms as used in this title have the
meaning expressed in this section:
(a) The term "person" means any individual, partnership,
corporation, limited liability company, trust, estate, cooperative,
association, government or governmental subdivision or agency, or
other entity. The term "person" as used in this title shall not be
construed to require duplicative reporting by any individual,
corporation, trust, estate, cooperative, association, government, or
governmental subdivision or agency, or other entity involved in the
same transaction.
(b) The term "consumer" means a natural individual who has made
application to a person for employment purposes, for insurance for
personal, family, or household purposes, or the hiring of a dwelling
unit, as defined in subdivision (c) of Section 1940.
(c) The term "investigative consumer report" means a consumer
report in which information on a consumer's character, general
reputation, personal characteristics, or mode of living is obtained
through any means. The term does not include a consumer report or
other compilation of information that is limited to specific factual
information relating to a consumer's credit record or manner of
obtaining credit obtained directly from a creditor of the consumer or
from a consumer reporting agency when that information was obtained
directly from a potential or existing creditor of the consumer or
from the consumer. Notwithstanding the foregoing, for transactions
between investigative consumer reporting agencies and insurance
institutions, agents, or insurance-support organizations subject to
Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of
Division 1 of the Insurance Code, the term "investigative consumer
report" shall have the meaning set forth in subdivision (n) of
Section 791.02 of the Insurance Code.
(d) The term "investigative consumer reporting agency" means any
person who, for monetary fees or dues, engages in whole or in part in
the practice of collecting, assembling, evaluating, compiling,
reporting, transmitting, transferring, or communicating information
concerning consumers for the purposes of furnishing investigative
consumer reports to third parties, but does not include any
governmental agency whose records are maintained primarily for
traffic safety, law enforcement, or licensing purposes, or any
licensed insurance agent, insurance broker, or solicitor, insurer, or
life insurance agent.
(e) The term "file," when used in connection with information on
any consumer, means all of the information on that consumer recorded
and retained by an investigative consumer reporting agency regardless
of how the information is stored.
(f) The term "employment purposes," when used in connection with
an investigative consumer report, means a report used for the purpose
of evaluating a consumer for employment, promotion, reassignment, or
retention as an employee.
(g) The term "medical information" means information on a person's
medical history or condition obtained directly or indirectly from a
licensed physician, medical practitioner, hospital, clinic, or other
medical or medically related facility.
SEC. 8. Section 1786.10 of the Civil Code is amended to read:
1786.10. (a) Every investigative consumer reporting agency shall,
upon request and proper identification of any consumer, allow the
consumer to visually inspect all files maintained regarding the
consumer at the time of the request.
(b) All items of information shall be available for inspection,
except that the sources of information, other than public records,
acquired solely for use in preparing an investigative consumer report
and actually used for no other purpose need not be disclosed.
However, if an action is brought under this title, those sources
shall be available to the consumer under appropriate discovery
procedures in the court in which the action is brought.
Nothing in this title shall be interpreted to mean that
investigative consumer reporting agencies are required to divulge to
consumers the sources of investigative consumer reports except in
appropriate discovery procedures as outlined herein.
(c) The investigative consumer reporting agency shall also
identify the recipients of any investigative consumer report on the
consumer that the investigative consumer reporting agency has
furnished:
(1) For employment or insurance purposes within the three-year
period preceding the request.
(2) For any other purpose within the three-year period preceding
the request.
(d) The identification of a recipient under subdivision (c) shall
include the name of the recipient or, if applicable, the trade name
(written in full) under which the recipient conducts business and,
upon request of the consumer, the address and telephone number of the
recipient.
(e) The investigative consumer reporting agency shall also
disclose the dates, original payees, and amounts of any checks or
charges upon which is based any adverse characterization of the
consumer, included in the file at the time of the disclosure.
SEC. 9. Section 1786.11 of the Civil Code is amended to read:
1786.11. Every investigative consumer reporting agency that
provides an investigative consumer report to a person other than the
consumer shall make a copy of that report available, upon request and
proper identification, to the consumer for at least six months after
the date that the report is provided to the other person.
SEC. 10. Section 1786.16 of the Civil Code is amended to read:
1786.16. (a) Any person described in subdivision (d) of Section
1786.12 shall not procure or cause to be prepared an investigative
consumer report unless the following applicable conditions are met:
(1) If an investigative consumer report is sought in connection
with the underwriting of insurance, it shall be clearly and
accurately disclosed in writing at the time the application form,
medical form, binder, or similar document is signed by the consumer
that an investigative consumer report regarding the consumer's
character, general reputation, personal characteristics, and mode of
living may be made. If no signed application form, medical form,
binder, or similar document is involved in the underwriting
transaction, the disclosure shall be made to the consumer in writing
and mailed or otherwise delivered to the consumer not later than
three days after the report was first requested. The disclosure
shall include the name and address of any investigative consumer
reporting agency conducting an investigation, plus the nature and
scope of the investigation requested, and a summary of the provisions
of Section 1786.22.
(2) If, at any time, an investigative consumer report is sought
for employment purposes other than promotion or reassignment, the
person procuring or causing the report to be made shall, not later
than three days after the date on which the report was first
requested, notify the consumer in writing that an investigative
consumer report regarding the consumer's character, general
reputation, personal characteristics, and mode of living will be
made. This notification shall include the name and address of the
investigative consumer reporting agency conducting the investigation,
the nature and scope of the investigation requested, and a summary
of the provisions of Section 1786.22.
(3) If an investigative consumer report is sought in
connection with the hiring of a dwelling unit, as defined in
subdivision (c) of Section 1940, the person procuring or causing the
request to be made shall, not later than three days after the date on
which the report was first requested, notify the consumer in writing
that an investigative consumer report will be made regarding the
consumer's character, general reputation, personal characteristics,
and mode of living. The notification shall also include the name and
address of the investigative consumer reporting agency that will
prepare the report and a summary of the provisions of Section
1786.22.
(4) The person procuring or causing the request to be made shall
certify to the investigative consumer reporting agency that the
person has made the applicable disclosures to the consumer required
by this subdivision and that the person will comply with subdivision
(b).
(5) The person procuring the report or causing it to be prepared
agrees to provide a copy of the report to the subject of the
investigation, as provided in subdivision (b).
(b) Any person described in subdivision (d) of Section 1786.12 who
requests an investigative consumer report regarding that consumer
shall provide the consumer with a copy of the report and information
on who issued the report and how to contact them, either at the time
of the meeting or interview between the consumer and the person who
requests an investigative consumer report regarding that consumer or
within seven days of the date such person receives the report,
whichever is earlier.
(c) The provisions of subdivision (a) shall not apply to an
investigative consumer report procured or caused to be prepared by an
employer if the purpose of the employer is to determine whether to
retain an employee when there is a good faith belief that the
employee is engaged in any criminal activity likely to result in a
loss to the employer.
(d) Those persons described in subdivision (d) of Section 1786.12
of this title shall constitute the sole and exclusive class of
persons who may cause an investigative consumer report to be
prepared.
SEC. 11. Section 1786.18 of the Civil Code is amended to read:
1786.18. (a) Except as authorized under subdivision (b), no
investigative consumer reporting agency shall make or furnish any
investigative consumer report containing any of the following items
of information:
(1) Bankruptcies that, from the date of adjudication, antedate the
report by more than 10 years.
(2) Suits that, from the date of filing, and satisfied judgments
that, from the date of entry, antedate the report by more than seven
years.
(3) Unsatisfied judgments that, from the date of entry, antedate
the report by more than seven years.
(4) Unlawful detainer actions where the defendant was the
prevailing party or where the action is resolved by settlement
agreement.
(5) Paid tax liens that, from the date of payment, antedate the
report by more than seven years.
(6) Accounts placed for collection or charged to profit and loss
that antedate the report by more than seven years.
(7) Records of arrest, indictment, information, misdemeanor
complaint, or conviction of a crime that, from the date of
disposition, release, or parole, antedate the report by more than
seven years. These items of information shall no longer be reported
if at any time it is learned that, in the case of a conviction, a
full pardon has been granted or, in the case of an arrest,
indictment, information, or misdemeanor complaint, a conviction did
not result; except that records of arrest, indictment, information,
or misdemeanor complaints may be reported pending pronouncement of
judgment on the particular subject matter of those records.
(8) Any other adverse information that antedates the report by
more than seven years.
(b) The provisions of subdivision (a) are not applicable in the
case of any investigative consumer report to be used in the
underwriting of life insurance involving, or that may reasonably be
expected to involve, an amount of one hundred fifty thousand dollars
($150,000) or more.
(c) Except as otherwise provided in Section 1786.28, an
investigative consumer reporting agency shall not furnish an
investigative consumer report that includes information that is a
matter of public record and that relates to an arrest, indictment,
conviction, civil judicial action, tax lien, or outstanding judgment,
unless the agency has verified the accuracy of the information
during the 30-day period ending on the date on which the report is
furnished.
(d) An investigative consumer reporting agency shall not prepare
or furnish an investigative consumer report on a consumer that
contains information that is adverse to the interest of the consumer
and that is obtained through a personal interview with a neighbor,
friend, or associate of the consumer or with another person with whom
the consumer is acquainted or who has knowledge of the item of
information, unless either (1) the investigative consumer reporting
agency has followed reasonable procedures to obtain confirmation of
the information, from an additional source that has independent and
direct knowledge of the information, or (2) the person interviewed is
the best possible source of the information.
SEC. 12. Section 1786.20 of the Civil Code is amended to read:
1786.20. (a) Every investigative consumer reporting agency shall
maintain reasonable procedures designed to avoid violations of
Section 1786.18 and to limit furnishing of investigative consumer
reports for the purposes listed under Section 1786.12. These
procedures shall require that prospective users of the information
identify themselves, certify the purposes for which the information
is sought and that the information will be used for no other
purposes, and make the certifications described in paragraph (4) of
subdivision (a) of Section 1786.16. From the effective date of this
title, the investigative consumer reporting agency shall keep a
record of the purposes for which information is sought, as stated by
the user. Every investigative consumer reporting agency shall make a
reasonable effort to verify the identity of a new prospective user
and the uses certified by the prospective user prior to furnishing
the user any investigative consumer reports. No investigative
consumer reporting agency may furnish any investigative consumer
reports to any person unless it has a written agreement that the
investigative consumer reports will be used by that person only for
purposes listed in Section 1786.12.
(b) Whenever an investigative consumer reporting agency prepares
an investigative consumer report, it shall follow reasonable
procedures to assure maximum possible accuracy of the information
concerning the individual about whom the report relates. An
investigative consumer reporting agency shall retain the
investigative consumer report for a period of three years.
(c) An investigative consumer reporting agency shall not make an
inquiry for the purpose of preparing an investigative consumer report
on a consumer for employment purposes if the making of the inquiry
by an employer or prospective employer of the consumer would violate
any applicable federal or state equal employment opportunity law or
regulation.
(d) Any investigative consumer reporting agency that violates this
section shall be liable to the consumer affected in an amount not
less than twenty-five thousand dollars ($25,000).
SEC. 13. Section 1786.24 of the Civil Code is amended to read:
1786.24. (a) If the completeness or accuracy of any item of
information contained in his or her file is disputed by a consumer,
and the dispute is conveyed directly to the investigative consumer
reporting agency by the consumer, the investigative consumer
reporting agency shall, without charge, reinvestigate and record the
current status of the disputed information or delete the item from
the file in accordance with subdivision (c), before the end of the
30-day period beginning on the date on which the agency receives the
notice of the dispute from the consumer.
(b) The agency shall notify any person who provided information in
dispute at the address and in the manner specified by that person.
The notice shall include all relevant information regarding the
dispute that the investigative consumer reporting agency has received
from the consumer. The agency shall also promptly provide to the
person who provided the information in dispute all relevant
information regarding the dispute that is received by the agency from
the consumer during the reinvestigation.
(c) In conducting a reinvestigation, the investigative consumer
reporting agency shall review and consider all relevant information
submitted by the consumer with respect to the disputed item of
information.
(d) Notwithstanding subdivision (a), an investigative consumer
reporting agency may terminate a reinvestigation of information
disputed by a consumer if the investigative consumer reporting agency
reasonably determines that the dispute is frivolous or irrelevant,
including by reason of a failure by a consumer to provide sufficient
information to investigate the disputed information. Upon making a
determination that a dispute is frivolous or irrelevant, the
investigative consumer reporting agency shall notify the consumer, by
mail or, if authorized by the consumer for that purpose, by any
other means available to the agency. In this notification, the
investigative consumer reporting agency shall state the specific
reasons why it has determined that the consumer's dispute is
frivolous or irrelevant and provide a description of any information
required to investigate the disputed information, that may consist of
a standardized form describing the general nature of the required
information.
(e) If a reinvestigation is made and, after reinvestigation, the
disputed item of information is found to be inaccurate, incomplete,
or cannot be verified by the evidence submitted, the investigative
consumer reporting agency shall promptly delete that information from
the consumer's file or modify the information, as appropriate, based
on the results of the reinvestigation, and shall notify the consumer
that the information has been deleted or modified.
(f) No information may be reinserted in a consumer's file after
having been deleted pursuant to this section unless the person who
furnished the information verifies that the information is complete
and accurate. If any information deleted from a consumer's file is
reinserted in the file, the investigative consumer reporting agency
shall promptly notify the consumer of the reinsertion in writing or,
if authorized by the consumer for that purpose, by any other means
available to the agency. As part of, or in addition to, this notice,
the investigative consumer reporting agency shall provide to the
consumer in writing (1) a statement that the disputed information has
been reinserted, (2) the name, address, and telephone number of any
furnisher of information contacted or that contacted the
investigative consumer reporting agency in connection with the
reinsertion, and the telephone number of the furnisher, if reasonably
available, and (3) a notice that the consumer has the right to a
reinvestigation of the information reinserted by the investigative
consumer reporting agency and to add a statement to his or her file
disputing the accuracy or completeness of the information.
(g) An investigative consumer reporting agency shall provide
notice to the consumer of the results of any reinvestigation under
this section by mail or, if authorized by the consumer for that
purpose, by other means available to the agency. The notice shall
include (1) a statement that the reinvestigation is completed, (2) an
investigative consumer report that is based on the consumer's file
as that file is revised as a result of the reinvestigation, (3) a
description or indication of any changes made in the investigative
consumer report as a result of those revisions to the consumer's
file, (4) a notice that, if requested by the consumer, a description
of the procedure used to determine the accuracy and completeness of
the information shall be provided to the consumer by the
investigative consumer reporting agency, including the name, business
address, and telephone number of any furnisher of information
contacted in connection with that information, (5) a notice that the
consumer has the right to add a statement to the consumer's file
disputing the accuracy or completeness of the information, and (6) a
notice that the consumer has the right to request that the
investigative consumer reporting agency furnish notifications under
subdivision (k).
(h) The presence of information in the consumer's file that
contradicts the contention of the consumer shall not, in and of
itself, constitute reasonable grounds for believing the dispute is
frivolous or irrelevant.
(i) If the investigative consumer reporting agency determines that
the dispute is frivolous or irrelevant, or if the reinvestigation
does not resolve the dispute, or if the information is reinserted
into the consumer's file pursuant to subdivision (f), the consumer
may file a brief statement setting forth the nature of the dispute.
The investigative consumer reporting agency may limit these
statements to not more than 500 words if it provides the consumer
with assistance in writing a clear summary of the dispute.
(j) Whenever a statement of dispute is filed, the investigative
consumer reporting agency shall, in any subsequent investigative
consumer report containing the information in question, clearly note
that the information is disputed by the consumer and shall include in
the report either the consumer's statement or a clear and accurate
summary thereof.
(k) Following the deletion of information from a consumer's file
pursuant to this section, or following the filing of a dispute
pursuant to subdivision (i), the investigative consumer reporting
agency shall, at the request of the consumer, furnish notification
that the item of information has been deleted or that the item of
information is disputed. In the case of disputed information, the
notification shall include the statement or summary of the dispute
filed pursuant to subdivision (i). This notification shall be
furnished to any person who has, within two years prior to the
deletion or the filing of the dispute, received an investigative
consumer report concerning the consumer for employment purposes, or
who has, within one year of the deletion or the filing of the
dispute, received an investigative consumer report concerning the
consumer for any other purpose, if these investigative consumer
reports contained the deleted or disputed information, unless the
consumer specifically requests in writing, that this notification not
be given to all persons or to any specified persons. The
investigative consumer reporting agency shall clearly and
conspicuously disclose to the consumer his or her rights to make a
request that this notification not be made.
(l) An investigative consumer reporting agency shall maintain
reasonable procedures designed to prevent the reappearance in a
consumer's file and in investigative consumer reports information
that has been deleted pursuant to this section and not reinserted
pursuant to subdivision (f).
(m) If the consumer's dispute is resolved by deletion of the
disputed information within three business days, beginning with the
day the investigative consumer reporting agency receives notice of
the dispute in accordance with subdivision (a), the investigative
consumer reporting agency shall be exempt from requirements for
further action under subdivisions (g), (i), and (j), if the agency:
(1) provides prompt notice of the deletion to the consumer by
telephone, (2) provides written confirmation of the deletion and a
copy of an investigative consumer report of the consumer that is
based on the consumer's file after the deletion, and (3) includes, in
the telephone notice or in a written notice that accompanies the
confirmation and report, a statement of the consumer's right to
request under subdivision (k) that the agency not furnish
notifications under that subdivision.
(n) Any investigative consumer reporting agency that compiles and
maintains files on consumers on a nationwide basis, as defined in the
federal Fair Credit Reporting Act, as amended (15 U.S.C. Sec. 1681
et seq.), shall implement an automated system through which
furnishers of information to that agency may report the results of a
reinvestigation that finds incomplete or inaccurate information in a
consumer's file to other investigative consumer reporting agencies.
(o) All actions to be taken by an investigative consumer reporting
agency under this section are governed by the applicable time
periods specified in Section 611 of the federal Fair Credit Reporting
Act, as amended (15 U.S.C. Sec. 1681i).
SEC. 14. Section 1786.26 of the Civil Code is amended to read:
1786.26. (a) An investigative consumer reporting agency shall
make all disclosures pursuant to Sections 1786.10 and 1786.22 and
furnish all investigative consumer reports pursuant to Section
1786.24, without charge, if requested by the consumer.
(b) Except as otherwise provided in subdivision (d), an
investigative consumer reporting agency may charge a consumer a fee
not exceeding eight dollars ($8) for making disclosures to the
consumer pursuant to Sections 1786.10, 1786.11, and 1786.22. Any
charges shall be indicated to the consumer prior to disclosure.
(c) An investigative consumer reporting agency shall not impose
any charge for providing notice to a consumer required under Section
1786.24 or notifying a person pursuant to subdivision (k) of Section
1786.24 of the deletion of information that is found to be inaccurate
or that cannot be verified.
(d) Upon the request of the consumer, an investigative consumer
reporting agency shall make all disclosures pursuant to Section
1786.10 and 1786.22 once during any 12-month period without charge to
that consumer if the consumer certifies in writing that he or she
(1) is unemployed and intends to apply for employment in the 60-day
period beginning on the date the certification is made, (2) is a
recipient of public welfare assistance, or (3) has reason to believe
that the file on the consumer at the investigative consumer reporting
agency contains inaccurate information due to fraud.
(e) An investigative consumer reporting agency shall not impose
any charge on a consumer for providing any notification or making any
disclosure required by this title, except as authorized by this
section.
SEC. 15. Section 1786.28 of the Civil Code is amended to read:
1786.28. (a) Each investigative consumer reporting agency that
collects, assembles, evaluates, compiles, reports, transmits,
transfers, or communicates items of information concerning consumers
which are matters of public record shall specify in any report
containing public record information the source from which this
information was obtained, including the particular court, if
applicable, and the date that this information was initially reported
or publicized.
(b) A consumer reporting agency which furnishes a consumer report
for employment purposes and which for that purpose compiles collects,
assembles, evaluates, compiles, reports, transmits, transfers, or
communicates items of information on consumers which are matters of
public record and are likely to have an adverse effect upon a
consumer's ability to obtain employment shall in addition maintain
strict procedures designed to insure that whenever public record
information which is likely to have an adverse effect on a consumer's
ability to obtain employment is reported it is complete and up to
date. For purposes of this paragraph, items of public record
relating to arrests, indictments, convictions, suits, tax liens, and
outstanding judgments shall be considered up to date if the current
public record status of the item at the time of the report is
reported.
SEC. 16. Section 1786.29 is added to the Civil Code, to read:
1786.29. An investigative consumer-reporting agency shall provide
the following notices:
(a) As a cover sheet to any report, a notice in at least 16 point
type that sets forth the following disclosures or warnings:
(1) The report does not guarantee the accuracy or truthfulness of
the information as to the subject of the investigation, but only that
it is accurately copied from public records. Evidence of identity
theft may or may not be identified from this report.
(2) The recipient of this report shall give a copy of this report
to the subject of the report.
(3) Failure to provide a copy of the report as required by law may
expose you to liability as specified in Section 1786.50.
(b) An investigative consumer reporting agency shall provide a
consumer seeking to obtain a copy of a report or making a request to
review a file, a written notice in simple plain English and Spanish
setting forth the terms and conditions of his or her right to receive
all disclosures as provided in Section 1786.26.
SEC. 17. Article 3 (commencing with Section 1786.40) of Title 1.6A
of Part 4 of Division 3 of the Civil Code is repealed.
SEC. 18. Section 1786.50 of the Civil Code is amended to read:
1786.50. (a) In addition to the penalty specified in Section
1786.20, any investigative consumer reporting agency or user of
information that fails to comply with any requirement under this
title with respect to an investigative consumer report is liable to
the consumer who is the subject of the report in an amount equal to
the sum of all the following:
(1) Any actual damages sustained by the consumer as a result of
the failure or, except in the case of class actions, ten thousand
dollars ($10,000), whichever sum is greater.
(2) In the case of any successful action to enforce any liability
under this chapter, the costs of the action together with reasonable
attorney's fees as determined by the court.
(b) If the court determines that the violation was grossly
negligent or willful, the court may, in addition, assess, and the
consumer may recover, punitive damages.
(c) Notwithstanding subdivision (a), an investigative consumer
reporting agency or user of information that fails to comply with any
requirement under this title with respect to an investigative
consumer report shall not be liable to a consumer who is the subject
of the report where the failure to comply results in a more favorable
investigative consumer report than if there had not been a failure
to comply.
SEC. 19. Section 1786.52 of the Civil Code is amended to read:
1786.52. Nothing in this chapter shall in any way affect the
right of any consumer to maintain an action against an investigative
consumer reporting agency, a user of an investigative consumer
report, or an informant for invasion of privacy or defamation.
An action to enforce any liability created under this title may be
brought in any appropriate court of competent jurisdiction within
two years from the date of discovery.
(a) Any investigative consumer reporting agency or user of
information against whom an action brought pursuant to Section 1681n
or 1681o of Title 15 of the United States Code is pending shall not
be subject to suit for the same act or omission under Section
1786.50.
(b) The entry of a final judgment against the investigative
consumer reporting agency or user of information in an action brought
pursuant to the provisions of Section 1681n or 1681o of Title 15 of
the United States Code shall be a bar to the maintenance of any
action based on the same act or omission which might be brought under
this title.
SEC. 20. Section 1786.53 is added to the Civil Code, to read:
1786.53. Any person who collects, assembles, evaluates, compiles,
reports, transmits, transfers, or communicates information on a
consumer's character, general reputation, personal characteristics,
or mode of living for the purposes specified in subdivision (a) of
Section 1786, in lieu of using the services of an investigative
consumer reporting agency, shall provide that information to the
consumer at the time of the meeting or interview with the consumer,
or within seven days of the date the person obtains the information
regarding the consumer, whichever is earlier.
SEC. 21. Section 1788.4 is added to the Civil Code, to read:
1788.4. (a) No creditor may sell a consumer debt to a
debt collector if the consumer's file with a consumer credit
reporting agency is blocked with respect to that debt pursuant to
subdivision (k) of Section 1785.16, or the creditor has reason to
believe that the consumer is not obligated to pay the debt because he
or she is a victim of identity theft, as defined in subdivision (d)
of Section 1798.80.
(b) Subdivision (a) does not apply to a creditor, or a subsidiary
or affiliate of a creditor, if the consumer has an account with that
creditor.
SEC. 22. Title 1.81A (commencing with Section 1798.90) is added to
Part 4 of Division 3 of the Civil Code, to read:
TITLE 1.81A. IDENTITY THEFT
1798.90. For the purposes of this title:
(a) "Claimant" means a person who has or purports to have a claim
for money or an interest in property in connection with a transaction
procured through identity theft.
(b) "Identity theft" means the unauthorized use of another person'
s personal identifying information to obtain credit, goods, services,
money, or property.
(c) "Personal identifying information" means a person's name,
address, telephone number, driver's license number, social security
number, place of employment, employee identification number, mother's
maiden name, demand deposit account number, savings account number,
or credit card number.
(d) "Victim of identity theft" means a person who had his or her
personal identifying information used without authorization by
another to obtain credit, goods, services, money, or property, and
did not use or possess the credit, goods, services, money, or
property obtained by the identity theft, and filed a police report in
this regard pursuant to Section 530.5 of the Penal Code.
1798.91. (a) A person may bring an action against a claimant to
establish that the person is a victim of identity theft in connection
with the claimant's claim against that person. If the claimant has
brought an action to recover on its claim against the person, the
person may file a cross complaint to establish that the person is a
victim of identity theft
in connection with the claimant's claim.
(b) A person shall establish that he or she is a victim of
identity theft by a preponderance of the evidence.
(c) A person who proves that he or she is a victim of identity
theft, as defined in Section 530.5 of the Penal Code, shall be
entitled to a judgment providing all of the following:
(1) A declaration that he or she is not obligated to the claimant
on that claim.
(2) A declaration that any security interest or other interest the
claimant had purportedly obtained in the victim's property in
connection with that claim is void and unenforceable.
(3) An injunction restraining the claimant from collecting or
attempting to collect from the victim on that claim, from enforcing
or attempting to enforce any security interest or other interest in
the victim's property in connection with that claim, or from
enforcing or executing on any judgment against the victim on that
claim.
(4) If the victim has filed a cross complaint against the
claimant, the dismissal of any cause of action in the complaint filed
by the claimant based on a claim which arose as a result of the
identity theft.
(5) Actual damages, attorney's fees, and costs, and any equitable
relief that the court deems appropriate. In order to recover actual
damages or attorney's fees in an action or cross complaint filed by a
person alleging that he or she is a victim of identity theft, the
person shall show that he or she provided written notice to the
claimant that a situation of identity theft might exist, including,
upon written request of the claimant, a valid copy of the police
report or the Department of Motor Vehicles investigative report
promptly filed pursuant to Section 530.5 of the Penal Code
prior to filing the action or cross-complaint pursuant to this
at least 30 days prior to his or her filing of the
action, or within his or her cross-complaint pursuant to this
section.
(6) A civil penalty, in addition to any other damages, of up to
thirty thousand dollars ($30,000) if the victim establishes by clear
and convincing evidence all of the following:
(A) That at least 30 days prior to filing an action or within the
cross complaint pursuant to this section, he or she provided written
notice to the claimant at the address designated by the claimant for
complaints related to credit reporting issues that a situation of
identity theft might exist and explaining the basis for that belief.
(B) That the claimant failed to diligently investigate the victim'
s notification of a possible identity theft.
(C) That the claimant continued to pursue its claim against the
victim after the claimant was presented with facts that were later
held to entitle the victim to a judgment pursuant to this section.
1798.92. Notwithstanding Section 379 of the Code of Civil
Procedure, a person bringing an action or filing a cross complaint
under this title may join other claimants in the same action or the
same cross complaint regardless of whether each claimant's claim
arises out of the same transaction or occurrence.
1798.93. A court shall have continuing jurisdiction over an
action or cross complaint filed pursuant to this title in order to
provide for the joinder of related causes of action based on the
theft of the same person's identity and the joinder of further
defendants based upon the theft of the same person's identity,
regardless of whether a final judgment has been entered as to any
defendant. The court's continuing jurisdiction shall terminate 10
years after filing of the original action unless the court, prior to
that date, finds good cause to extend jurisdiction over the matter.
1798.94. Any action brought pursuant to this title or any joinder
of a defendant pursuant to Section 1798.82 may be brought within
four years of the date the person who alleges that he or she is a
victim of identity theft knew or, in the exercise of reasonable
diligence, should have known of the existence of facts which would
give rise to the bringing of the action or joinder of the defendant.
1798.95. (a) This title does not apply to a transaction subject
to Section 1747.10.
(b) Nothing is this title shall be construed to affect a claimant'
s rights and remedies against a person who perpetrates identity theft
or against any person who used or possessed the credit, goods,
services, or property obtained by identity theft.
(c) This title is cumulative to the rights and remedies provided
under other laws.