BILL NUMBER: AB 2868 CHAPTERED
BILL TEXT
CHAPTER 1029
FILED WITH SECRETARY OF STATE SEPTEMBER 28, 2002
APPROVED BY GOVERNOR SEPTEMBER 28, 2002
PASSED THE ASSEMBLY AUGUST 22, 2002
PASSED THE SENATE AUGUST 19, 2002
AMENDED IN SENATE AUGUST 14, 2002
AMENDED IN SENATE JUNE 26, 2002
AMENDED IN SENATE JUNE 12, 2002
AMENDED IN ASSEMBLY APRIL 18, 2002
INTRODUCED BY Assembly Member Wright
FEBRUARY 25, 2002
An act to amend Sections 47, 1786.11, 1786.18, 1786.20, 1786.24,
and 1786.50 of, and to add Section 1785.16.3 to the Civil Code,
relating to personal information reporting, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 2868, Wright. Personal information reporting.
(1) Existing law relating to defamation provides that libel is a
false and unprivileged written publication that injures the
reputation, and that slander is a false and unprivileged publication,
orally uttered, that injures the reputation, as specified. Existing
law makes privileged, and therefore protected from the threat of
civil action, certain publications and communications, including
those communications regarding job performance and qualifications, as
specified.
This bill would revise the provisions concerning the privileged
character of communications regarding job performance and
qualifications to specify their application to applicants for
employment and to authorize a current or former employer, or the
employer's agent, to answer whether or not the employer would rehire
a current or former employee.
(2) Existing law establishes 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 information in specified instances, and
establishes requirements for unblocking information after an
allegation of identity theft.
This bill would exclude from these provisions a consumer reporting
agency that acts only as a reseller of credit information, as
specified, and that does not maintain a permanent database of credit
information from which new credit reports are produced.
(3) Existing law requires an investigative consumer reporting
agency to keep a copy of an investigative consumer report for at
least 3 years.
This bill would reduce the period of time the report must be made
available to the consumer to 2 years after the report is provided.
(4) Existing law prohibits an investigative consumer reporting
agency from making or furnishing an investigative consumer report
containing specified items of information, except where the report is
used in the underwriting of life insurance, as specified.
This bill would provide an additional exception to the
above-described prohibition on specified items of information when an
employer is explicitly required by a governmental regulatory agency
to check for records that investigative consumer reports are
prohibited from containing when the employer is reviewing a consumer'
s qualification for employment.
(5) Existing law requires an investigative consumer reporting
agency to require that prospective users of information identify
themselves and to certify the purposes for which the information
sought will be used. Existing law further requires an investigative
consumer reporting agency to keep a record of the purposes for which
information is sought. Existing law provides that an investigative
consumer reporting agency that violates these and other specified
provisions is liable to the affected consumer for not less than
$25,000, in addition to liability for actual damages or $10,000,
whichever is greater, as specified, reasonable attorneys' fees, costs
of the action, and punitive damages, in the discretion of the court,
when the violation is willful or grossly negligent.
This bill would permit an investigative consumer reporting agency
to assume that the purpose for which a user seeks information remains
the same as that which a user has previously stated. The bill would
require the investigative consumer reporting agency to inform the
user that the user is obligated to notify the agency of any change in
the purpose for which information will be used. The bill would also
limit the liability of an investigative consumer reporting agency as
described above, to an amount not less than $25,000, reasonable
attorneys' fees, and the costs of the action, as specified.
(6) Existing law requires an investigative consumer reporting
agency to promptly notify a consumer, as specified, when information
deleted from a consumer's file is reinserted, and requires the agency
to provide a notice to the consumer stating that the consumer has a
right to a reinvestigation of the information and to add a statement
to the file, as specified.
This bill would provide an exception to the notice regarding
reinvestigation of the information and the right to add a statement
when the reinsertion results from the resolution of a prior dispute ,
and was made at the request of, or with the prior approval of, the
consumer.
(7) Existing law requires an investigative consumer reporting
agency to provide certain notices to specified parties who have
received, in the prior 2 years, an investigative consumer report
regarding a consumer when information is deleted from a consumer's
file or following the filing of a specified dispute regarding the
information, unless the consumer explicitly requests this
notification not be given.
This bill would provide that the notifications described above be
furnished, instead, to any person specifically designated by the
consumer.
(8) This bill would declare that it is to take effect immediately
as an urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 47 of the Civil Code is amended to read:
47. A privileged publication or broadcast is one made:
(a) In the proper discharge of an official duty.
(b) In any (1) legislative proceeding, (2) judicial proceeding,
(3) in any other official proceeding authorized by law, or (4) in the
initiation or course of any other proceeding authorized by law and
reviewable pursuant to Chapter 2 (commencing with Section 1084) of
Title 1 of Part 3 of the Code of Civil Procedure, except as follows:
(1) An allegation or averment contained in any pleading or
affidavit filed in an action for marital dissolution or legal
separation made of or concerning a person by or against whom no
affirmative relief is prayed in the action shall not be a privileged
publication or broadcast as to the person making the allegation or
averment within the meaning of this section unless the pleading is
verified or affidavit sworn to, and is made without malice, by one
having reasonable and probable cause for believing the truth of the
allegation or averment and unless the allegation or averment is
material and relevant to the issues in the action.
(2) This subdivision does not make privileged any communication
made in furtherance of an act of intentional destruction or
alteration of physical evidence undertaken for the purpose of
depriving a party to litigation of the use of that evidence, whether
or not the content of the communication is the subject of a
subsequent publication or broadcast which is privileged pursuant to
this section. As used in this paragraph, "physical evidence" means
evidence specified in Section 250 of the Evidence Code or evidence
that is property of any type specified in Section 2031 of the Code of
Civil Procedure.
(3) This subdivision does not make privileged any communication
made in a judicial proceeding knowingly concealing the existence of
an insurance policy or policies.
(4) A recorded lis pendens is not a privileged publication unless
it identifies an action previously filed with a court of competent
jurisdiction which affects the title or right of possession of real
property, as authorized or required by law.
(c) In a communication, without malice, to a person interested
therein, (1) by one who is also interested, or (2) by one who stands
in such a relation to the person interested as to afford a reasonable
ground for supposing the motive for the communication to be
innocent, or (3) who is requested by the person interested to give
the information. This subdivision applies to and includes a
communication concerning the job performance or qualifications of an
applicant for employment, based upon credible evidence, made without
malice, by a current or former employer of the applicant to, and upon
request of, one whom the employer reasonably believes is a
prospective employer of the applicant. This subdivision authorizes a
current or former employer, or the employer's agent, to answer
whether or not the employer would rehire a current or former
employee. This subdivision shall not apply to a communication
concerning the speech or activities of an applicant for employment if
the speech or activities are constitutionally protected, or
otherwise protected by Section 527.3 of the Code of Civil Procedure
or any other provision of law.
(d) (1) By a fair and true report in, or a communication to, a
public journal, of (A) a judicial, (B) legislative, or (C) other
public official proceeding, or (D) of anything said in the course
thereof, or (E) of a verified charge or complaint made by any person
to a public official, upon which complaint a warrant has been issued.
(2) Nothing in paragraph (1) shall make privileged any
communication to a public journal that does any of the following:
(A) Violates Rule 5-120 of the State Bar Rules of Professional
Conduct.
(B) Breaches a court order.
(C) Violates any requirement of confidentiality imposed by law.
(e) By a fair and true report of (1) the proceedings of a public
meeting, if the meeting was lawfully convened for a lawful purpose
and open to the public, or (2) the publication of the matter
complained of was for the public benefit.
SEC. 2. Section 1785.16.3 is added to the Civil Code, to read:
1785.16.3. The provisions of subdivisions (k) and (l) of Section
1785.16 do not apply to a consumer reporting agency that acts only as
a reseller of credit information by assembling and merging
information contained in the database of another consumer reporting
agency or agencies, and that does not maintain a permanent database
of credit information from which new credit reports are produced.
SEC. 3. 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 two years after
the date that the report is provided to the other person.
SEC. 4. Section 1786.18 of the Civil Code is amended to read:
1786.18. (a) Except as authorized under subdivision (b), an
investigative consumer reporting agency may not 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 either
of the following circumstances:
(1) If the investigative consumer report is to be used in the
underwriting of life insurance involving, or that may reasonably be
expected to involve, an amount of two hundred fifty thousand dollars
($250,000) or more.
(2) If the investigative consumer report is to be used by an
employer who is explicitly required by a governmental regulatory
agency to check for records that are prohibited by subdivision (a)
when the employer is reviewing a consumer's qualification for
employment.
(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. 5. 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. The investigative consumer reporting agency may assume
that the purpose for which a user seeks information remains the same
as that which a user has previously stated. The investigative
consumer reporting agency shall inform the user that the user is
obligated to notify the agency of any change in the purpose for which
information will be used. 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 two years after the
report is provided.
(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). In the case of a
successful action to enforce liability under this section, a court
may award the costs of the action together with reasonable attorney's
fees as determined by the court.
SEC. 6. 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. The consumer
reporting agency shall also notify any and all sources from which the
disputed information was obtained and inform them in writing of the
reasons and results of the reinvestigation, and send a copy of this
notification to the consumer.
(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, except
when the reinsertion results from the resolution of a prior dispute ,
and was made at the request of, or with the prior approval of, the
consumer.
(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, specifically designated by the consumer, 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. The investigative consumer reporting agency
shall clearly and conspicuously disclose to the consumer his or her
rights to make a request for this notification.
(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 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. 7. Section 1786.50 of the Civil Code is amended to read:
1786.50. (a) An investigative consumer reporting agency or user
of information that fails to comply with any requirement under this
title, except for the requirements of Section 1786.20, 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. 8. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to clarify confusion over the operational provisions of
Chapter 354 of the Statutes of 2001, and further protect consumer
interests in relation to credit information and identity theft, it is
necessary that this act take immediate effect.