Portion of Senate Floor Analysis- AB156

Intent of the bill

AB 156 is intended to clarify existing state law, to require credit reporting agencies to conduct a more thorough investigation when consumers complain of fraud, and to provide consumers with rights and remedies that are not currently available. Specifically, AB 156:
--Would make misusing another persons identity punishable as a misdemeanor.
--Would require retailers or other persons requesting a credit report to certify to the credit reporting agency that the retailer has a policy of requiring it's employees to inspect a photo identification of the consumer at the time an in-store application is submitted in person. (Current law provides no identification requirement of any kind.)
--Would provide procedures to ensure the maximum possible accuracy of consumer information by prohibiting the release of a credit report unless there are at least three categories between information submitted to the agency and the information in the consumers' file. (The current industry practice is two categories.)
--Would provide that if a consumer victim of identity theft submits a valid police report to a credit reporting agency, that inaccurate information be promptly and permanently blocked from the consumers credit file. (Victims of identity theft currently have limited resources for cleaning up their credit once a criminal has damaged it.)
--Would require that credit by mail offers be extended only if the address on the returned application corresponds with the address at which offer was mailed, unless the prospective user verifies the address change. (This provision is intended to thwart a criminals' ability to steal mail and return credit offers with a fraudulent change of address.)

LEGISLATIVE COUNSEL'S DIGEST AB 156, Murray. Personal information: credit reporting agencies.

(1) The existing Consumer Credit Reporting Agencies Act provides for the regulation of consumer credit reporting agencies thatregularly engage in whole or in part in the business of assembling orevaluating consumer credit information or other information on consumers for the purpose of furnishing consumer credit reports to3rd parties. Existing law prohibits a consumer credit reportingagency from furnishing a consumer credit report to any person unless it has reasonable grounds to believe that the consumer credit report will be used by this person for expressly provided purposes.

This bill would additionally require a prospective user of theconsumer credit report who is a retail seller to provide the consumer credit agency with at least 3 categories of information regarding the consumer that matches, as specified, information within a fileassembled by the consumer credit reporting agency and to certify, inspecified instances, that it requires its employees and agents toinspect a photo identification of a consumer for credit.

(2) The act specifies procedures for the consumer credit reportingagency to follow in case a consumer disputes the completeness oraccuracy of any item of information contained in his or her file. This bill would revise these procedures to, among other things,require the consumer credit reporting agency to promptly andpermanently block the reporting of disputed information and so notifythe furnisher of the information if the consumer submits a validpolice report concerning the crime described in (4), as specified.However, the bill would specify certain conditions under which theinformation may be unblocked.

(3) The Consumer Credit Reporting Agencies Act prescribes civilremedies for the violation of the act and provides that theprevailing parties in any action commenced to obtain these remediesshall be entitled to recover court costs and reasonable attorney'sfees. The act also prescribes a 2-year statute of limitations fromthe date liability arises under the act. This bill would provide that the prevailing party shall beentitled to recover these costs and attorney's fees unless theplaintiff only seeks and obtains injunctive relief to compelcompliance with the act. This bill would revise the statute of limitations, as specified.

(4) This bill would also provide that it is a misdemeanor for a person to willfully obtain personal identifying information, as defined, of another person and use another individual's personalidentifying information and obtain, or attempt to obtain, credit,goods, or services in the name of the other person without theconsent of that person. By creating a new crime, this bill wouldimpose a state-mandated local program.

(5) The bill would provide that it will become operative on July1, 1998, except for the provisions described in (4) above, which would become operative on January 1, 1998. (6) The California Constitution requires the state to reimburselocal agencies and school districts for certain costs mandated by thestate. Statutory provisions establish procedures for making thatreimbursement. This bill would provide that no reimbursement is required by thisact for a specified reason.