Legislature(2015 - 2016)BARNES 124
04/08/2016 03:15 PM LABOR & COMMERCE
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SB 121-SECURITY FREEZE ON CERTAIN CREDIT REPORTS 3:22:54 PM CHAIR OLSON announced that the first order of business would be CS FOR SENATE BILL NO. 121(JUD), "An Act relating to a security freeze on the consumer credit report of a minor, incapacitated person, or protected person." 3:23:07 PM EDRA MORLEDGE, staff, Senator Kevin Meyer, Alaska State Legislature, advised that SB 121 is a consumer protection bill allowing a parent, legal guardian, or conservator to place a security freeze on a dependent's credit file. If a credit report does not exist because the child is a dependent and has not established credit of their own, the credit bureaus would be directed to establish a credit file for the purpose of placing a freeze on the file. She reminded the committee that identity theft is a growing concern which local, state, and federal governments are taking measures to combat. Following testimony heard in the Senate Judiciary Standing Committee, the bill was expanded from coverage for minor children to include incapacitated adults and other protected individuals. Often, she explained, those individuals have not established credit in their own names and they may not be able to manage their own finances or to establish credit. This legislation allows those tasked with managing another person's finances to place a security freeze on their credit file. 3:25:06 PM CHAIR OLSON opened public testimony. 3:25:18 PM LAURA HUGHES stated support for SB 121, and concurred with Ms. Morledge's testimony. Ms. Hughes and her husband used a credit freeze and were looking to do the same for their daughters, but found that Alaska does not have a law to do so. She contacted Senator Meyer's office and related that she hopes to see the bill become law. REPRESENTATIVE LEDOUX asked whether adults can obtain a freeze on their credit files. MS. MORLEDGE answered yes. Currently, the Personal Information Protection Act (PIPA), contains procedures for individuals to contact credit bureaus and place a freeze on their own credit file. In further response to Representative LeDoux, she explained that a credit freeze means the credit bureau cannot share your credit score or your credit history with another company that is inquiring for the purposes of establishing credit with the inquiring company. REPRESENTATIVE LEDOUX asked whether a person would put a freeze on their credit file if they thought someone was trying to steal their identity. Otherwise, she commented, how would a person ever obtain credit? MS. MORLEDGE said if one fears another person has access to their social security number or other personal information, one could place a freeze for the purpose of knowing their credit file is secure and cannot be shared with other companies. There are also provisions in PIPA which allow a person to unfreeze the credit file temporarily or permanently, she said. REPRESENTATIVE LEDOUX surmised that under this bill if the parents or guardian froze the child's account they would be able to unfreeze it. MS. MORLEDGE agreed, and advised the parent could unfreeze it, or the Alaskan child, who at age 16 years can apply for financial aid, can unfreeze their credit. 3:29:11 PM REPRESENTATIVE HUGHES observed that if a minor's parents froze their child's account, after turning 18 years-of-age he/she could unfreeze their credit file. MS. MORLEDGE said correct. REPRESENTATIVE HUGHES pointed out that young people are purchasing more products than in prior years, and asked whether that is the reason this bill is necessary. MS. MORLEDGE explained how research shows that people have become aware of increasing identity theft of children. The national rate is approximately 11 percent for children who have had their social security numbers used without their consent or their parents' knowledge. Further, children are about 35 times more likely than adults to have their identity stolen because [their records] are a "blank slate." Approximately 16 to 20 states have pending legislation allowing a credit freeze by parents because people are beginning to recognize the problem. REPRESENTATIVE HUGHES commented on the worthiness of the proposed legislation. CHAIR OLSON, after ascertaining no one wished to testify, closed public testimony. 3:32:20 PM REPRESENTATIVE HUGHES moved to report CSSB 121(JUD), Version 29- LS1129\E, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSSB 121(JUD) was reported out of the House Labor and Commerce Standing Committee.