BILL NUMBER: SB 1454 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 27, 1998
INTRODUCED BY Senators Leslie and Watson
(Coauthors: Assembly Members Bowler, House, Kaloogian, and
Prenter)
FEBRUARY 2, 1998
An act to amend Sections 1786.2, 1786.10, 1786.12, 1786.16,
1786.18, 1786.20, 1786.24, 1786.26, 1786.30, 1786.40, and 1786.50 of,
and to add Section 1786.11 to, the Civil Code, relating to
investigative consumer reporting.
LEGISLATIVE COUNSEL'S DIGEST
SB 1454, as amended, Leslie. Investigative consumer reporting.
Existing law, as contained in the Investigative Consumer Reporting
Agencies Act, regulates the preparation, disclosure, and use of
investigative consumer reports.
Existing law defines an "investigative consumer report" as a
report in which specified information on a consumer is obtained
through personal interviews and defines an "investigative consumer
reporting agency" as any person who, for a fee, assembles employment
or insurance information, or information relating to the hiring of
dwelling units concerning consumers for 3rd parties for
specified purposes.
This bill would redefine an "investigative consumer report" as a
report in which specified consumer information is obtained
for employment or insurance purposes or for renting a dwelling
by any means , and an "investigative consumer
reporting agency" as any person who, for a fee, assembles any
information concerning consumers for those specified
purposes 3rd parties .
Existing law generally provides that a person may not obtain an
investigative consumer report with respect to a consumer unless the
person discloses in writing to the consumer that the report will be
made , and provides other specified information.
This bill would require, as a further condition to obtaining an
investigative consumer report, that the person certify to the agency
that he or she (a) has made the required consumer disclosures and (b)
will provide additional specified disclosures if requested by the
consumer. The bill would also require an investigative consumer
reporting agency that provides an investigative consumer report to a
person other than the consumer to make a copy of that report
available to the consumer, as specified, for at least 60 days after
the date the report is provided to the other person.
Existing law provides that consumers have the right to visually
inspect all files maintained by an investigative consumer reporting
agency regarding that consumer, except medical information, as
defined. Existing law also provides that consumers have the right to
be informed by the user of consumer information of the reasons for
any adverse action taken with respect to specified insurance due to
information obtained from a person other than an investigative
consumer reporting agency, except that the user may withhold medical
information, as defined, until the consumer obtains written
authorization from the consumer's physician.
This bill would delete both of these exceptions relating to
medical information.
Existing law provides that investigative consumer reports may not
include, among other things, any arrest records, paid tax liens, or
other specified items that antedate the report by more than 7 years.
This bill would specify that information relating to an arrest,
indictment, conviction, civil action, tax lien, or outstanding
judgment may not be included in a report unless verified by the
agency no more than 30 days prior to the date of the report, and
adverse information obtained through a personal interview, as
specified, may not be included in a report unless it is either
verified by a 2nd party or the interviewee is the best source of the
information.
Existing law gives consumers the right to dispute inaccurate
information contained in an investigative consumer report and to
bring an action to recover damages for violations of the act in an
amount equal to the greater of actual damages or $300.
This bill would add new procedures and notice requirements
relating to the investigation of disputes by consumers and the
deletion of information in a consumer's file that is determined to be
inaccurate. The bill would also increase the minimum amount of
damages recoverable by a consumer for violations of the act from $300
to $1,000.
Existing law specifies that reasonable charges may be imposed upon
a consumer to receive a copy of an investigative consumer report
relating to that consumer, unless the copy is requested after the
taking of an adverse action against the consumer based on the report,
as specified.
This bill would specify the amount of fee, if any, that may be
charged to a consumer to receive a copy of an
investigative consumer report or other information, notices
or disclosures , relating to that
consumer. The bill would require investigative consumer reporting
agencies to provide a consumer with a copy of his or her
investigative consumer report, free of charge, not more often
that than once a year, if the consumer
is unemployed, is seeking employment, receives public welfare
assistance, or believes that his or her file contains inaccurate
information due to fraud.
The bill would make other related changes.
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 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
for employment purposes, or for insurance primarily for
personal, family, or household purposes, or for purposes relating to
the hiring of a dwelling unit, as defined in subdivision (c) of
Section 1940, except that the 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.
(d) The term "investigative consumer reporting agency" means any
person who, for monetary fees or dues, regularly engages in whole or
in part in the practice of assembling or evaluating information
concerning consumers for the purposes of furnishing investigative
consumer reports to third parties, to be used with respect
to consumers for employment purposes or, insurance primarily for
personal, family, or household purposes, or for purposes relating to
the hiring of dwelling units, but report 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" "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) "Investigative consumer reporting agency that compiles and
maintains files on consumers on a nationwide basis" means an
investigative consumer reporting agency that regularly engages in the
practice of assembling or evaluating , and
maintaining information relating to consumers residing nationwide,
bearing on a consumer's character, general reputation, personal
characteristics, or mode of living, from persons who furnish that
information regularly and in the ordinary course of business, for the
purpose of furnishing investigative consumer reports to third
parties for employment purposes, or insurance primarily for personal,
family, or household purposes, or for purposes relating to the
hiring of dwelling units.
SEC. 2. 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 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 two-year
period preceding the request.
(2) For any other purpose within the one-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 upon
which is based any adverse characterization of the consumer, included
in the file at the time of the disclosure.
SEC. 3. Section 1786.11 is added to the Civil Code, 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 60 days after
the date that the report is provided to the other person.
SEC. 4. Section 1786.12 of the Civil Code is amended to read:
1786.12. An investigative consumer reporting agency shall only
furnish an investigative consumer report under the following
circumstances:
(a) In response to the order of a court having jurisdiction to
issue such an the order.
(b) In compliance with a lawful subpoena issued by a court of
competent jurisdiction.
(c) In accordance with the written instructions of the consumer to
whom it relates.
(d) To a person that it has reason to believe:
(1) Intends to use the information for employment purposes; or
(2) Intends to use the information serving as a factor in
determining a consumer's eligibility for insurance or the rate for
such any insurance; or
(3) Intends to use the information in connection with a
determination of the consumer's eligibility for a license or other
benefit granted by a governmental instrumentality required by law to
consider the applicant's financial responsibility or status; or
(4) Intends to use the information in connection with an order of
a court of competent jurisdiction to provide support where the
imposition or enforcement of the order involves the consumer; or
(5) Intends to use the information in connection with the hiring
of a dwelling unit, as defined in subdivision (c) of Section 1940.
(e) An investigative consumer reporting agency shall not prepare
or furnish an investigative consumer report to a person described in
subdivision (d) unless the agency has received the certification
under paragraph (4) of subdivision (a) of Section 1786.16 from the
person requesting the report.
SEC. 5. 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 a
writing mailed or otherwise delivered to the consumer not later than
three days after the report was first requested.
(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 of the consumer
reporting agency conducting the investigation 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 consumer reporting agency that will prepare the report.
(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).
(b) Any person described in subdivision (d) of Section 1786.12
shall, upon written request made by the consumer within a reasonable
period of time after the receipt by the consumer of the disclosure
required by subdivision (a), make a complete and accurate disclosure
of the nature and scope of the investigation requested. This
disclosure shall be made in writing , and
mailed or otherwise delivered , to the
consumer not later than five days after the date the request for the
disclosure was received from the consumer or the report was first
requested, whichever is later.
(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:
(1) Determine whether or not an employee is to be retained; and
(2) To determine whether or not such 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. 6. 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 14 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 10 years.
(4) Unlawful detainer actions, unless the lessor was the
prevailing party. For purposes of this paragraph, the lessor shall
be deemed to be the prevailing party only if (A) final judgment was
awarded to the lessor (i) upon entry of the tenant's default, (ii)
upon the granting of the lessor's motion for summary judgment, or
(iii) following trial, or (B) the action was resolved by a written
settlement agreement between the parties that states that the
unlawful detainer action may be reported. In any other instance in
which the action is resolved by settlement agreement, the lessor
shall not be deemed to be the prevailing party for purposes of this
paragraph.
(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, and information
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) Except as otherwise provided in subdivision
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.
(c) 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 consumer credit 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. 7. 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 to 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 consumer reports.
No investigative consumer reporting agency may furnish any
investigative consumer reports to any person unless it has reasonable
grounds for believing that the investigative consumer reports will
be used by that person 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.
(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 purpose
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.
SEC. 8. 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 credit 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 100 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 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. 9. 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 consumer reports pursuant to Section 1786.24 ,
without charge, if requested by the consumer within 60 days after
receipt by the consumer of a notification of adverse action pursuant
to Section 1786.40 stating that adverse action may be or has been
taken on the consumer.
(b) Except as otherwise provided, an investigative consumer
reporting agency may impose a reasonable charge on a consumer
as follows:
(1) For for making disclosures to the
consumer pursuant to Sections 1786.10, 1786.11, and 1786.22 ,
the investigative consumer reporting agency may charge a fee
not exceeding eight dollars ($8).
(2) For furnishing a notification, statement, or summary to any
person pursuant to subdivision (k) of Section 1786.24, the
investigative consumer reporting agency may charge a fee not
exceeding the charge that it would impose on each designated
recipient for an investigative consumer report.
(3) 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. 10. Section 1786.30 of the Civil Code is amended to read:
1786.30. Whenever an investigative consumer reporting agency
prepares an investigative consumer report, no adverse information in
the report (other than information that is a matter of public record,
the status of which has been updated pursuant to Section 1786.28)
may be included in a subsequent investigative consumer report unless
that adverse information has been verified in the process of making
the subsequent investigative consumer report, or the adverse
information was received within the three-month period preceding the
date the subsequent report is furnished.
SEC. 11. Section 1786.40 of the Civil Code is amended to read:
1786.40. (a) Whenever insurance for personal, family, or
household purposes, employment, or the hiring of a dwelling unit
involving a consumer is denied or the charge for that insurance or
the hiring of a dwelling unit is increased either wholly or partly
because of information contained in an investigative consumer report
from an investigative consumer reporting agency, the user of the
investigative consumer report shall so advise the consumer against
whom the adverse action has been taken and supply the name and
address of the investigative consumer reporting agency making the
report.
(b) Whenever insurance for personal, family, or household purposes
involving a consumer is denied or the charge for that insurance is
increased either wholly or in part because of information obtained
from a person other than an investigative consumer reporting agency,
the consumer, or another person related to the consumer and acting on
the consumer's behalf and bearing upon the consumer's general
reputation, personal characteristics or mode of living, the user of
the information shall, within a reasonable period of time, and upon
the consumer's written request for the reasons for the adverse action
received within 60 days after learning of the adverse acton,
disclose the nature and substance of the information to the consumer.
The user of the information shall clearly and accurately disclose
to the consumer his or her right to make this written request at the
time the adverse action is communicated to the consumer.
SEC. 12. Section 1786.50 of the Civil Code is amended to read:
1786.50. (a) 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, one thousand
dollars ($1,000), whichever sum is greater, and
(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.