SENATE JUDICIARY COMMITTEE SUBSTITUTE FOR
SENATE BILLS 165 & 448
48th legislature - STATE OF NEW MEXICO - first session, 2007
AN ACT
RELATING TO CONSUMER CREDIT; PROVIDING FOR A SECURITY FREEZE ON THE RELEASE OF CONSUMER CREDIT INFORMATION; ENACTING THE CREDIT REPORT SECURITY ACT; PROVIDING PENALTIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. SHORT TITLE.--This act may be cited as the "Credit Report Security Act".
Section 2. DEFINITIONS.--As used in the Credit Report Security Act:
A. "consumer" means an individual who is a resident of New Mexico;
B. "consumer reporting agency" means any person that, for monetary fees, dues or on a cooperative nonprofit basis, regularly engages in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing credit reports to third parties;
C. "credit report" means a written, oral or other communication of information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living that is used or expected to be used or collected for the purpose of serving as a factor in establishing the consumer's eligibility for credit, insurance, investment, benefit, employment or other purpose as authorized by the federal Fair Credit Reporting Act, 15 U.S.C. Section 1681a;
D. "person" means an individual, corporation, firm, association, organization, trust, estate, cooperative, business, partnership, limited liability company, joint venture, governmental agency or subdivision or any legal or commercial entity; 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 or the opening of new accounts without the express authorization of the consumer.
Section 3. SECURITY FREEZE.--
A. A consumer may elect to place a security freeze on the consumer's credit report by making a request to a consumer reporting agency by means of certified or regular mail sent to an address designated by the consumer reporting agency, by telephone, facsimile or through a secure electronic method provided by the agency. A consumer shall provide any personal identification required by the consumer reporting agency and pay a fee, if applicable.
B. A consumer reporting agency shall place a security freeze on a consumer's credit report no later than three business days after receiving a request from the consumer.
C. On the same day that a consumer reporting agency places a security freeze on a consumer's credit report, it shall:
(1) send a written confirmation of the security freeze to the consumer; and
(2) provide the consumer with a unique personal identification number, password or similar device to be used by the consumer when providing authorization for the release of the consumer's credit report to a specific person or for a specific period of time or for permanent removal of the freeze.
D. While a security freeze is in effect, a consumer may authorize a consumer reporting agency to release the consumer's credit report to a specific person or to release the credit report for a specific period of time by contacting the consumer reporting agency by regular or certified mail, by telephone or facsimile or by a secure electronic method and providing:
(1) proper identification;
(2) the unique personal identification number, password or similar device; and
(3) information regarding the party that is to have access to the credit report or the time period during which the credit report can be released.
E. A consumer reporting agency that receives a request pursuant to Subsection D of this section shall release a consumer's credit report as requested by the consumer no later than three business days after receiving the request; provided that no acts of God or vandalism by third parties prevent the consumer reporting agency from releasing the consumer's credit report.
F. If a third party requests access to a credit report on which a security freeze is in effect for the purpose of receiving, extending or otherwise using the credit in that report, the consumer reporting agency shall notify the consumer that an attempt was made to access the consumer's credit report.
G. If a consumer reporting agency releases information on a credit report while a security freeze is in effect and without a consumer's authorization, it shall notify the consumer within five business days of the release of information, including the specific information released and the third party to whom it has been released.
H. A security freeze shall remain in place until a consumer requests its removal. A consumer reporting agency shall remove the security freeze within three business days after receiving a request from a consumer who provides the unique personal identification number, password or similar device and proper identification.
I. A consumer reporting agency may charge a consumer who is less than sixty-five years of age a fee of no more than five dollars ($5.00) for the initial placement of a security freeze. A consumer reporting agency may charge a fee of no more than ten dollars ($10.00) for the release of a credit report, upon which a security freeze has been placed, to a specific person or for a specific period of time but shall not charge a fee for the removal of a security freeze. A fee shall not be charged to a victim of identity theft who provides a valid police or investigative report filed with a law enforcement agency.
J. If a consumer's credit report was frozen due to a material misrepresentation of fact by the consumer and a consumer reporting agency intends to remove the freeze, the consumer reporting agency shall notify the consumer in writing
five business days prior to removing the security freeze on the consumer's credit report.
K. A consumer reporting agency may advise a third party that a security freeze is in effect with respect to a consumer's credit report. A consumer reporting agency shall not suggest or otherwise state or imply to a third party that the security freeze reflects a negative credit score, history, report or rating.
L. The provisions of this section do not prevent a consumer reporting agency from providing information to:
(1) a person that has a current debtor-creditor relationship with the consumer or a collection agency for the purpose of collecting a debt owed to that person;
(2) a person acting pursuant to a court order, warrant or subpoena;
(3) the child support enforcement division of the human services department for the purpose of carrying out its statutory duties of establishing and collecting child support obligations;
(4) a governmental agency acting to investigate fraud, to investigate or collect delinquent taxes or unpaid court orders or to fulfill any of its other statutory duties;
(5) a person for the purposes of prescreening as defined by the federal Fair Credit Reporting Act;
(6) a consumer reporting agency for its database or file if the database or file consists only of and is used solely for one or more of the following:
(a) criminal record information;
(b) tenant screening;
(c) employment screening; or
(d) fraud prevention or detection; or
(7) a person or entity for use in setting or adjusting an insurance rate, adjusting an insurance claim or underwriting for insurance purposes.
Section 4. NOTICE OF RIGHTS.--At any time that a consumer reporting agency is required to provide the consumer with a summary of rights pursuant to Section 609 of the federal Fair Credit Reporting Act, the following notice shall be included:
"New Mexico Consumers Have the
Right to Obtain a Security Freeze
You may obtain a security freeze on your credit report to protect your privacy and ensure that credit is not granted in your name without your knowledge. You have a right to place a security freeze on your credit report pursuant to the Credit Report Security Act.
The security freeze will prohibit a consumer reporting agency from releasing any information in your credit report without your express authorization or approval.
The security freeze is designed to prevent credit, loans and services from being approved in your name without your consent. When you place a security freeze on your credit report, within three business days, you will be provided with a personal identification number, password or similar device to use if you choose to remove the freeze on your credit report or to temporarily authorize the release of your credit report to a specific party or parties or for a specific period of time after the freeze is in place. To remove the freeze or to provide authorization for the temporary release of your credit report, you must contact the consumer reporting agency and provide all of the following:
(1) the unique personal identification number, password or similar device provided by the consumer reporting agency;
(2) proper identification to verify your identity; and
(3) information regarding the third party or parties who are to receive the credit report or the period of time for which the credit report may be released to users of the credit report.
A consumer reporting agency that receives a request from a consumer to lift temporarily a freeze on a credit report shall comply with the request no later than three business days after receiving the request.
A security freeze does not apply in all circumstances, such as where you have an existing account relationship and a copy of your credit report is requested by your existing creditor or its agents for certain types of account review, collection, fraud control or similar activities; for use in setting or adjusting an insurance rate or claim or insurance underwriting; for certain governmental purposes; and for purposes of prescreening as defined in the federal Fair Credit Reporting Act.
If you are actively seeking a new credit, loan, utility, telephone or insurance account, you should understand that the procedures involved in lifting a security freeze may slow your own applications for credit. You should plan ahead and lift a freeze, either completely if you are shopping around or specifically for a certain creditor, with enough advance notice before you apply for new credit for the lifting to take effect. You should contact a consumer reporting agency and request it to lift the freeze at least three business days before applying. You have a right to bring a civil action against a consumer reporting agency that violates your rights under the Credit Report Security Act.".
Section 5. VIOLATION OF SECURITY FREEZE--CIVIL LIABILITY.--If a consumer reporting agency releases information placed under a security freeze in violation of the provisions of Section 3 of the Credit Report Security Act, the affected consumer may bring a civil action against the consumer reporting agency for:
A. injunctive relief to prevent further violation of the security freeze;
B. any actual damages sustained by the consumer as a result of the violation;
C. a civil penalty in an amount not to exceed two thousand dollars ($2,000) for each violation of the security freeze; and
D. costs of the action and reasonable attorney fees.
Section 6. SEVERABILITY.--If any part or application of the Credit Report Security Act is held invalid, the remainder or its application to other persons or situations shall not be affected.
Section 7. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2007.
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