California Legislature—2015–16 Regular Session

Assembly BillNo. 1580


Introduced by Assembly Member Gatto

January 5, 2016


An act to add Sections 1785.11.9, 1785.11.10, and 1785.11.11 to the Civil Code, relating to consumer credit reports.

LEGISLATIVE COUNSEL’S DIGEST

AB 1580, as introduced, Gatto. Consumer credit reports: security freezes: protected consumer.

Existing state law defines and regulates consumer credit reports and authorizes a consumer to place a security freeze on his or her credit report by making a request in writing by mail to a consumer credit reporting agency. Existing state law requires a consumer credit reporting agency to place the security freeze on the consumer’s credit report no later than 3 business days after receiving the consumer’s request.

This bill would authorize a representative of a protected consumer, defined as an individual who is under 16 years of age at the time a request for the placement of a security freeze is made or an incapacitated person or a protected individual for whom a guardian or conservator has been appointed, to place or remove a security freeze for the protected consumer, as specified.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

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SECTION 1.  

Section 1785.11.9 is added to the Civil Code, to
2read:

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1785.11.9.  

For purposes of Sections 1785.11.10 and
21785.11.11, the following terms shall have the following meanings:

3(a) “Protected consumer” means an individual who is either of
4the following:

5(1) Under 16 years of age at the time a request for the placement
6of a security freeze is made.

7(2) An incapacitated person or a protected person for whom a
8guardian or conservator has been appointed.

9(b) “Record” means a compilation of information that:

10(1) Identifies a protected consumer.

11(2) Was created by a consumer credit reporting agency solely
12for the purpose of complying with this section.

13(3) Is not otherwise authorized to be created or used to consider
14the protected consumer’s credit worthiness, credit standing, credit
15capacity, character, general reputation, personal characteristics,
16or mode of living.

17(c) “Representative” means a person who provides to a consumer
18credit reporting agency sufficient proof of authority to act on behalf
19of a protected consumer.

20(d) “Security freeze” means:

21(1) If a consumer reporting agency does not have a file
22pertaining to a protected consumer, a restriction that:

23(A) Is placed on the protected consumer’s record in accordance
24with this section.

25(B) Prohibits the consumer credit reporting agency from
26releasing the protected consumer’s record except as authorized in
27this section.

28(2) If a consumer reporting agency has a file pertaining to a
29protected consumer, a restriction that:

30(A) Is placed on a the protected consumer’s consumer report in
31accordance with this section.

32(B) Prohibits the consumer reporting agency from releasing the
33protected consumer’s consumer report or any information derived
34from the protected consumer’s consumer report except as
35authorized in this section.

36(e) “Sufficient proof of authority” means documentation that
37shows that a representative has authority to act on behalf of a
38protected consumer. This documentation includes, but is not limited
39to:

40(1) A court order.

P3    1(2) A lawfully executed and valid power of attorney.

2(3) A written, notarized statement signed by a representative
3that expressly describes the authority of the representative to act
4on behalf of a protected consumer.

5(f) “Sufficient proof of identification” means information or
6documentation that identifies a protected consumer or a
7representative of a protected consumer. This information or
8documentation includes, but is not limited to:

9(1) A social security number or a copy of a social security card
10issued by the Social Security Administration.

11(2) A certified copy or official copy of a birth certificate issued
12by the entity authorized to issue the birth certificate.

13(3) A copy of a driver’s license, an identification issued by the
14Department of Motor Vehicles, or any other government-issued
15identification.

16(4) A copy of a bill for telephone, sewer, septic tank, water,
17electric, oil, or natural gas services, that shows a name and a home
18address.

19

SEC. 2.  

Section 1785.11.10 is added to the Civil Code, to read:

20

1785.11.10.  

Sections 1785.11.9 to 1785.11.11, inclusive, do
21not apply to the use of a protected consumer report or record by
22any of the following:

23(a) A person or entity listed in subdivision (l) of Section
241785.11.2, or Section 1785.11.4 or 1785.11.6.

25(b) A person administering a credit file monitoring subscription
26service to which the protected consumer has subscribed or to which
27the representative of the protected consumer has subscribed on
28behalf of the protected consumer.

29(c) A person who provides the protected consumer or the
30protected consumer’s representative with a copy of the protected
31consumer’s consumer report on request of the protected consumer
32or of the protected consumer’s representative.

33(d) A person or entity that maintains or is a database used solely
34for one of the following purposes:

35(1) Criminal record information.

36(2) Personal loss history information.

37(3) Fraud prevention or protection.

38(4) Employment screening.

39(5) Tenant screening.

40

SEC. 3.  

Section 1785.11.11 is added to the Civil Code, to read:

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1785.11.11.  

(a) A consumer credit reporting agency shall place
2a security freeze for a protected consumer if both of the following
3occur:

4(1) The consumer credit reporting agency receives a request
5from the protected consumer’s representative for the placement
6of the security freeze pursuant to this section.

7(2) The protected consumer’s representative does all of the
8following:

9(A) Submits the request to the consumer credit reporting agency
10at the address or other point of contact and in the manner specified
11by the consumer reporting agency.

12(B) Provides to the consumer credit reporting agency sufficient
13proof of identification of the protected consumer and the
14representative.

15(C) Provides to the consumer reporting agency sufficient proof
16of authority to act on behalf of the protected consumer.

17(D) Pays to the consumer credit reporting agency a fee as
18authorized by subdivision (h).

19(b) If a consumer credit reporting agency does not have a file
20pertaining to a protected consumer when the consumer credit
21reporting agency receives a request pursuant to paragraph (1) of
22subdivision (a), the consumer credit reporting agency shall create
23a record for the protected consumer.

24(c) Within 30 days after receiving a request that meets the
25requirements of subdivision (a), a consumer credit reporting agency
26shall place a security freeze for the protected consumer.

27(d) Unless a security freeze for a protected consumer is removed
28pursuant to subdivision (g) or (i), a consumer credit reporting
29agency shall not release the protected consumer’s consumer report,
30any information derived from the protected consumer’s consumer
31report, or any record created for the protected consumer.

32(e) A security freeze for a protected consumer placed pursuant
33to this section shall remain in effect until either of the following
34occurs:

35(1) The protected consumer or the protected consumer’s
36representative requests that the consumer credit reporting agency
37remove the security freeze in accordance with subdivision (g).

38(2) The security freeze is removed in accordance with
39subdivision (i).

P5    1(f) To remove a security freeze, a protected consumer or a
2protected consumer’s representative shall do all of the following:

3(1) Submit a request for removal of the security freeze to the
4consumer credit reporting agency at the address or other point of
5contact and in the manner specified by the consumer credit
6reporting agency.

7(2) Provide to the consumer credit reporting agency:

8(A) If the request is made by the protected consumer:

9(i) Proof that the sufficient proof of authority for the protected
10consumer’s representative to act on behalf of the protected
11consumer is no longer valid.

12(ii) Sufficient proof of identification of the protected consumer.

13(B) If the request is made by the representative of a protected
14consumer:

15(i) Sufficient proof of identification of the protected consumer
16and the representative.

17(ii) Sufficient proof of authority to act on behalf of the protected
18consumer.

19(3) Pay to the consumer credit reporting agency a fee as
20authorized by subdivision (h).

21(g) Within 30 days after receiving a request that meets the
22requirements of subdivision (f), a consumer credit reporting agency
23shall remove a security freeze for a protected consumer.

24(h) (1) Except as provided in paragraph (2), a consumer credit
25 reporting agency may not charge a fee for any service performed
26pursuant to this section.

27(2) A consumer credit reporting agency is authorized to charge
28a reasonable fee, not exceeding ten dollars ($10), for each
29placement or removal of a security freeze for a protected consumer.

30(3) Notwithstanding paragraph (2), a consumer credit reporting
31agency shall not charge any fee pursuant to this section under any
32of the following circumstances:

33(A) The protected consumer’s representative has received a
34report of alleged identity fraud against the protected consumer
35under Section 530.5 of the Penal Code and has provided copy of
36the report to the consumer credit reporting agency.

37(B) The request for the placement or removal of a security freeze
38is for a protected consumer who is under 16 years of age at the
39time of the request and the consumer credit reporting agency has
40a report pertaining to the protected consumer.

P6    1(i) A consumer credit reporting agency is authorized to remove
2a security freeze for a protected consumer or to delete a record of
3a protected consumer if the security freeze was placed or the record
4was created based upon a material misrepresentation of fact by the
5protected consumer or the protected consumer’s representative.



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