SENATE BILL 165
48th legislature - STATE OF NEW MEXICO - first session, 2007
INTRODUCED BY
William E. Sharer
AN ACT
RELATING TO CONSUMER CREDIT; PROVIDING FOR A SECURITY FREEZE ON THE RELEASE OF CREDIT REPORT INFORMATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. DEFINITIONS.--As used in this act:
A. "consumer" means an individual who is a resident of this state;
B. "consumer reporting agency" has the meaning ascribed to it in 15 U.S.C. Section 1681a(f);
C. "credit report" has the meaning ascribed to the term "consumer report" in 15 U.S.C. Section 1681a(d);
D. "proper identification" has the meaning ascribed to it in 15 U.S.C. Section 1681h(a)(1); and
E. "security freeze" means a notice placed in a consumer's credit report, at the request of the consumer and subject to certain exceptions, that prohibits a consumer reporting agency from releasing the consumer's credit report or score relating to the extension of credit.
Section 2. SECURITY FREEZE.--
A. A consumer may request that a security freeze be placed on the consumer's credit report by sending a request in writing by certified mail to a consumer reporting agency at the address designated by the consumer reporting agency to receive such requests. A consumer reporting agency may advise a third party that a security freeze is in effect with respect to a consumer's credit report.
B. If a consumer requests a security freeze, the consumer reporting agency shall disclose to the consumer the process for placing and for temporarily lifting a security freeze and the process for allowing access to information from the consumer's credit report for a period of time while the security freeze is in place.
C. A consumer reporting agency shall place a security freeze on a consumer's credit report no later than five business days after receiving from a consumer:
(1) a written request described in Subsection A of this section;
(2) proper identification; and
(3) payment of a fee, if applicable.
D. A consumer reporting agency shall send a written confirmation of the placement of a security freeze to a consumer within ten business days after the placement of the security freeze. Upon placing the security freeze on the consumer's credit report, the consumer reporting agency shall provide the consumer with a unique personal identification number or password or similar device to be used by the consumer when providing authorization for the release of the consumer's credit report for a specific period of time.
E. If a consumer wishes to allow the consumer's credit report to be accessed for a specific period of time while a security freeze is in place, the consumer shall contact a consumer reporting agency, using a point of contact designated by the consumer reporting agency and requesting that the security freeze be temporarily lifted, and the consumer shall provide the following to the consumer reporting agency:
(1) proper identification;
(2) the unique personal identification number or password provided by the consumer reporting agency pursuant to Subsection D of this section;
(3) the time period during which the report shall be available to users of the credit report; and
(4) a fee, if applicable.
F. A consumer reporting agency receiving a request from a consumer to temporarily lift a security freeze on a credit report pursuant to Subsection E of this section shall comply with the request no later than three business days after receiving the request.
G. A consumer reporting agency may use a telephone, a fax, the internet or other electronic media to receive and process a request from a consumer to temporarily lift a security freeze on a credit report pursuant to Subsection E of this section in an expedited manner.
H. A consumer reporting agency shall remove or temporarily lift a security freeze placed on a consumer's credit report only upon the consumer's request pursuant to Subsection E or J of this section or if a consumer's credit report was frozen due to a material misrepresentation of fact. A consumer reporting agency shall notify a consumer in writing ten business days prior to removing the security freeze on the consumer's credit report.
I. If a third party requests access to a consumer's credit report on which a security freeze is in effect and the request is in connection with an application for credit or any other use and the consumer does not allow the consumer's credit report to be accessed for that period of time, the third party may treat the consumer's application as incomplete.
J. A security freeze shall remain in place until a consumer requests, using a point of contact designated by a consumer reporting agency, that the security freeze be removed. A consumer reporting agency shall remove a security freeze within three business days of receiving a request for removal from a consumer who provides:
(1) proper identification;
(2) the unique personal identification number or password or similar device provided by the consumer reporting agency pursuant to Subsection D of this section; and
(3) a fee, if applicable.
K. A consumer reporting agency shall require proper identification of the person making a request to place or remove a security freeze.
L. The provisions of this section do not apply to the use of a credit report by any of the following:
(1) a person or entity, or a subsidiary, affiliate or agent of that person or entity, or an assignee of a financial obligation owing by the consumer to that person or entity, or a prospective assignee of a financial obligation owing by the consumer to that person or entity in conjunction with the proposed purchase of the financial obligation, with which the consumer has or had prior to assignment an account or contract, including a demand deposit account, or to whom the consumer issued a negotiable instrument, for the purposes of reviewing the account or collecting the financial obligation owing for the account, contract or negotiable instrument. For purposes of this paragraph, "reviewing the account" includes activities related to account maintenance, monitoring, credit line increases and account upgrades and enhancements;
(2) a subsidiary, affiliate, agent, assignee or prospective assignee of a person to whom access has been granted by the consumer for purposes of facilitating the extension of credit or other permissible use;
(3) any state or local agency, law enforcement agency, trial court or private collection agency acting pursuant to a court order, warrant or subpoena;
(4) a child support agency acting pursuant to Title 4-D of the federal Social Security Act, 42 U.S.C. et seq.;
(5) the state or its agents or assigns acting to investigate fraud or acting to investigate or collect delinquent taxes or unpaid court orders or to fulfill any of its other statutory responsibilities; provided that such responsibilities are consistent with a permissible purpose under 15 U.S.C. Section 1681b;
(6) the use of credit information for the purposes of prescreening as provided for by the federal Fair Credit Reporting Act;
(7) any person or entity administering a credit report monitoring subscription or similar service to which the consumer has subscribed;
(8) any person or entity for the purpose of providing a consumer with a copy of the consumer's credit report or score upon the consumer's request; or
(9) any person using the information in connection with the underwriting of insurance.
M. This act does not prevent a consumer reporting agency from charging a fee of no more than ten dollars ($10.00) to a consumer for each security freeze, removal of a security freeze or temporary lift of a security freeze regarding access to a consumer credit report, except that a consumer reporting agency may not charge a fee to a victim of identity theft who has submitted a valid police report to the consumer reporting agency.
N. If a security freeze is in place, a consumer reporting agency shall not change a consumer's official information, including the consumer's name, date of birth, social security number and address in the consumer's credit report without sending a written confirmation of the change to the consumer within thirty days of the change being posted to the consumer's file. Written confirmation is not required for technical modifications of a consumer's official information, including name and street abbreviations, complete spellings or transposition of numbers or letters. In the case of an address change, the written confirmation shall be sent to both the new address and to the former address.
O. The following entities are not required to place a security freeze on a credit report:
(1) 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 multiple consumer credit reporting agencies and does not maintain a permanent database of credit information from which new consumer credit reports are produced. However, a consumer reporting agency acting as a reseller shall honor any security freeze placed on a consumer credit report by another consumer reporting agency;
(2) a check services or fraud prevention services company that issues reports on incidents of fraud or authorizations for the purpose of approving or processing negotiable instruments, electronic funds transfers or similar methods of payments; or
(3) a deposit account information service company that issues reports regarding account closures due to fraud, substantial overdrafts, automatic teller machine abuse or similar negative information regarding a consumer, to inquiring banks or other financial institutions for use only in reviewing a consumer request for a deposit account at the inquiring bank or financial institution.
P. At any time a consumer is required to receive a summary of rights pursuant to 15 U.S.C. Section 1681g(d), the following notice shall be included:
"New Mexico Consumers Have the Right to Obtain a Security Freeze.
You have a right to place a "security freeze" on your credit report, which will prohibit a consumer reporting agency from releasing the personal and financial information in your credit report without your express authorization. A security freeze must be requested in writing by certified mail. The security freeze is designed to prevent credit, loans and services from being approved in your name without your consent. However, you should be aware that using a security freeze to take control over who gets access to the personal and financial information in your credit report may delay, interfere with or prohibit the timely approval of any subsequent request or application you make regarding a new loan, credit, mortgage, government services or payments, rental housing, employment, investment, license, cellular phone, utilities, digital signature, internet credit card transaction or other services, including an extension of credit at point of sale. When you place a security freeze on your credit report, you will be provided a personal identification number or password to use if you choose to remove the security freeze on your credit report or authorize the release of your credit report for a period of time after the security freeze is in place. To provide that authorization, you must contact the consumer reporting agency and provide all of the following:
(1) proper identification to verify your identity;
(2) the unique personal identification number or password;
(3) the period of time for which the report shall be available; and
(4) payment of the appropriate fee.
A consumer reporting agency must authorize the release of your credit report no later than three business days after receiving the above information.
A security freeze does not apply to a person or entity, or its affiliates, or collection agencies acting on behalf of the person or entity, with which you have an existing account, that requests information in your credit report for the purposes of reviewing or collecting the account. Reviewing the account includes activities related to account maintenance, monitoring, credit line increases and account upgrades and enhancements.
You have a right to bring civil action against anyone, including a consumer reporting agency, who improperly obtains access to a file, knowingly or willfully misuses file data or fails to correct inaccurate file data.
Unless you are a victim of identity theft with a police report to verify the crime, a consumer reporting agency has the right to charge you up to ten dollars ($10.00) to place a freeze on your credit report, up to ten dollars ($10.00) to temporarily lift a security freeze on your credit report, depending on the circumstances, and up to ten dollars ($10.00) to remove a security freeze from your credit report.".
Q. Any person who willfully fails to comply with any requirement imposed under this section with respect to any consumer is liable to that consumer in an amount equal to the sum of:
(1) any actual damages sustained by the consumer as a result of the failure or damages of not less than one hundred dollars ($100) and not more than one thousand dollars ($1,000);
(2) such amount of punitive damages as the court may allow; and
(3) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney fees as determined by the court.
R. Any person who obtains a consumer report, requests a security freeze or requests the temporary lift of a security freeze or the removal of a security freeze from a consumer reporting agency under false pretenses or in an attempt to violate federal or state law shall be liable to the consumer reporting agency for actual damages sustained by the consumer reporting agency or one thousand dollars ($1,000), whichever is greater.
S. Any person who is negligent in failing to comply with any requirement imposed under this section with respect to any consumer is liable to that consumer in an amount equal to the sum of any actual damages sustained by the consumer as a result of the failure and, in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney fees as determined by the court.
T. Upon a finding by the court that an unsuccessful pleading, motion or other paper filed in connection with an action under this section was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney fees reasonable in relation to the work expended in responding to the pleading, motion or other paper.
Section 3. EFFECTIVE DATE.--The effective date of the provisions of this act is January 1, 2008.
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