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F I S C A L I M P A C T R E P O R T

SPONSOR Feldman

ORIGINAL DATE

LAST UPDATED

2/7/07

2/12/07 HB

SHORT TITLE Credit Report Security Act

SB 448/aSPAC

ANALYST Ortiz

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to SB165

SOURCES OF INFORMATION

LFC Files

Responses Received From

Attorney General’s Office (AGO)

Administrative Office of the Courts (AOC)

Administrative Office of the District Attorneys (AODA)

SUMMARY

Synopsis of Bill of SPAC Amendment

Senate Public Affairs Committee Amendment adds items that

consumer reporting agency is not

prevented from providing information to:

•

A person for the purposes of prescreening as defined by the federal Fair Credit Reporting

Act

•

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:

o

Criminal record information

o

Tenant screening

o

Employment screening, or

o

Fraud prevention or detection

A new section is added on severability, in which any part or application of the Credit Report

Security Act is held invalid the remainder of the application to other persons or situations shall

not be affected.

Senate Bill 448/aSPAC – Page

2

Synopsis of Original Bill

Senate Bill 448 enacts the Credit Report Security Act, providing consumers with the opportunity

to place a security freeze on the consumer’s credit report by making a request to a consumer

reporting agency to refrain from releasing any part of the consumer’s credit report or any

information derived from the report without the express authorization of the consumer.

SB 448 requires the consumer reporting agency to place a security freeze on a consumer’s credit

report no later than 5 business days after receiving a request from the consumer. As of July 1,

2008, however, an agency must place a freeze on a report no later than 3 business days after

receiving the request. As of July 1, 2009, an agency must place a freeze on a report no later than

1 business day after receiving the request.

SB 448 also provides that while a freeze is in effect, a consumer may authorize an agency to

release the report to a specific person or to release the report for a specific period of time. The

freeze shall remain in place until the consumer requests its removal. The agency must remove

the freeze within 3 business days after receiving the request. Under the Act, if an agency

releases information on a credit report while a freeze is in effect and without authorization, it

must notify the consumer within 5 business days.

SB 448 provides that an agency may charge a consumer up to $5 for the initial placement of a

freeze but shall not charge a fee for the release of a credit report to a person, for the release of a

credit report for a specific period of time or for the removal of the freeze, nor to a proven victim

of identity theft. The bill allows an agency to provide information to a person with a current

debtor-creditor relationship with the consumer, a person acting pursuant to a court order, warrant

or subpoena, the Child Support Enforcement Division in order to carry out its statutory duties of

establishing and collecting child support obligations, or 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.

SB 448 also provides that whenever an agency is required to provide the consumer with a

summary of rights under the federal Fair Credit Reporting Act, a specific notice of right to obtain

a freeze must be include.

Finally, SB 448 provides for the bringing of a civil action by a consumer, in the event an agency

releases information placed under a security freeze in violation of the act. The consumer may

seek the following:

1)

injunctive relief to prevent further violation of the security freeze;

2)

any actual damages sustained as a result of a violation;

3)

a civil penalty in an amount up to $2,000 for each violation of the security freeze; and

4)

costs of the action and reasonable attorney fees.

The effective date of the Act is July 1, 2007.

Senate Bill 448/aSPAC – Page

3

SIGNIFICANT ISSUES

According to the AGO, there is no evidence/documentation requirement to establish oneself as

one of the Sec. 3(L) exempt persons. On the face of the statute, nothing more than an oral

statement is required.

While the bill imposes liability on and creates a civil cause of action against a CRA that

wrongfully releases protected information, it does not create similar liability as against any

person who wrongfully requests and obtains that information.

PERFORMANCE IMPLICATIONS

The AODA suggests that if consumers take advantage of the provisions in the bill there would be

a reduction in identity theft prosecutions.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

Relates to SB165, which provides enhanced consumer protection against identity theft and

account fraud by permitting consumers to place a security freeze on their entire credit file

maintained by consumer credit reporting agencies without having suffered actual harm from

identity theft.

TECHNICAL ISSUES

The AGO notes that Florida's credit freeze statute contains the following provisions, which may

be appropriate additions:

"A third party requesting access to a consumer report on which a security freeze is in effect in

connection with an application for credit or other permissible use may treat the application as

incomplete if the consumer has not authorized a temporary lifting of the security freeze for the

period of time during which the request is made." F.S.A. Sec. 501.005(9).

Sec. 5: A consumer may bring an action for the various types of relief, including attorney fees

and costs. As written, it is not clear that fees and costs are a mandatory part of the relief to be

granted to a prevailing consumer. AGO suggests that there be an amendment that tracks the

Unfair Practices Act that says that the court shall award attorney fees and costs to prevailing

plaintiff. As written, the court may decide that an award of fees and costs (which is generally not

done in the U.S.) is not mandated.

OTHER SUBSTANTIVE ISSUES

The AOC notes that SB 448 requires the consumer reporting agency to place a security freeze on

a consumer’s credit report no later than 5 business days after receiving a request from the

consumer. As of July 1, 2008, however, an agency must place a freeze on a report no later than 3

business days after receiving the request. As of July 1, 2009, an agency must place a freeze on a

report no later than 1 business day after receiving the request. Is this feasible.

Senate Bill 448/aSPAC – Page

4

POSSIBLE QUESTIONS

Is the 15 minute response period established by Sec. 3(E) after July 1, 2009, commercially

practicable.

In Sec.3(G) there is a phased-in shorter time period for the CRA's action for implementing a

security freeze and for a request to release info to a specific person (Sec. 3(E)). Why not so a

similar phase-in of a shorter time period for notice of an improper release.

EO/sb:nt