Legislature(2015 - 2016)BELTZ 105 (TSBldg)

02/08/2016 01:30 PM JUDICIARY

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 121 Bills Previously Heard/Scheduled: TELECONFERENCED
Heard & Held
Heard & Held
-- Public Testimony --
Bills Previously Heard/Scheduled:
Moved CSSJR 15(JUD) Out of Committee
Moved CSSCR 4(JUD) Out of Committee
        SB 121-SECURITY FREEZE ON MINOR'S CREDIT REPORT                                                                     
1:34:40 PM                                                                                                                    
CHAIR MCGUIRE announced the consideration of SB 121.                                                                            
1:35:08 PM                                                                                                                    
SENATOR  KEVIN MEYER,  Alaska State  Legislature,  sponsor of  SB
121, stated  that this  is a consumer  protection bill,  aimed at                                                               
protecting  children  before  they  become  victims  of  identity                                                               
theft. His  constituent, Laura Hughes,  brought the issue  to his                                                               
CHAIR MCGUIRE  asked if the impetus  was a constituent who  had a                                                               
personal story.                                                                                                                 
SENATOR MEYER replied  his constituent would explain  how she and                                                               
her family were impacted.                                                                                                       
SENATOR  WIELECHOWSKI commented  that he,  too, has  constituents                                                               
who have expressed  concern with this issue so he  was pleased to                                                               
see the bill.                                                                                                                   
1:36:57 PM                                                                                                                    
EDRA MORLEDGE, Staff,  Senator Kevin Meyer, introduced  SB 121 on                                                               
behalf  of  the  sponsor,  speaking  to  the  following  prepared                                                               
     As you  know, identity theft  and financial fraud  is a                                                                    
     constant concern for  consumers. State legislatures and                                                                    
     the  federal  government   are  constantly  working  on                                                                    
     measures  to combat  ID theft  and protect  individuals                                                                    
     against these crimes.                                                                                                      
     An  area of  growing concern  is child  identity theft,                                                                    
     which  is  much  more  prevalent  than  adult  identity                                                                    
     theft,  as their  credit is  basically a  'blank slate'                                                                    
     for many years.                                                                                                            
     Since children  in general, do  not begin  to establish                                                                    
     credit until they're  18 years old or at  the time they                                                                    
     apply  for financial  aid for  higher education  (which                                                                    
     can be  as early as age  16 in this state),  many years                                                                    
     can go  by before identity  theft is caught. SB  121 is                                                                    
     designed to prevent  this, and is a  measure to protect                                                                    
     children before they become consumers.                                                                                     
     This legislation is designed to do two things:                                                                             
     1, it allows  a parent or guardian to  place a security                                                                    
     freeze on  a minor child or  dependent's credit report,                                                                    
     in order to prevent fraudulent financial activity.                                                                         
     2, if  no credit report exists  (presumably because the                                                                    
     child has  not established credit yet),  the parent can                                                                    
     request  that one  be  created in  order  to place  the                                                                    
     freeze.  For example,  the  parents of  a  new born  or                                                                    
     adopted child  could request a  credit agency  create a                                                                    
     credit file and then place the freeze.                                                                                     
     Traditionally, a  credit freeze  has usually  only been                                                                    
     requested after  some type  of fraudulent  activity has                                                                    
     been detected  - this legislation will  change that and                                                                    
     give parents  and guardians proactive tools  to prevent                                                                    
     identity theft.                                                                                                            
     Across the country there a large mix of state laws                                                                         
     allowing credit freezes:                                                                                                   
     27 States,  including Alaska,  allow "any  consumer" to                                                                    
     place a  security freeze with  no provision  for minors                                                                    
     or protected individuals.                                                                                                  
     4 States specify  that a parent or guardian  of a minor                                                                    
     under 18, can place freeze.                                                                                                
     And  the  majority of  states  provide  for allowing  a                                                                    
     parent or  guardian of a "protected  consumer" to place                                                                    
     a  freeze on  an  incapacitated individual  or a  minor                                                                    
     under 16.                                                                                                                  
     3 states allow  a security freeze to be  placed only if                                                                    
     the  individual  is a  victim  of  id theft,  and  some                                                                    
     provide for  only residents of  the state to  place the                                                                    
1:39:50 PM                                                                                                                    
LAURA HUGHES,  representing herself,  testified in support  of SB
121. She  explained that she  and her husband froze  their credit                                                               
after they  purchased their house, and  she tried to do  the same                                                               
after their  daughter was born  because they'd heard  that minors                                                               
are  more susceptible  than adults  to  identity theft.  "They're                                                               
essentially a clean slate and  you don't know that their identity                                                               
has been  stolen until they  are 16 or  18," she said.  When they                                                               
found  that  Alaska  didn't  have  a process  to  do  this,  they                                                               
contacted Senator Meyer's office.                                                                                               
DAVYN  WILLIAMS,  Assistant  Attorney  General,  Civil  Division,                                                               
Commercial and  Fair Business Section,  Department of  Law (DOL),                                                               
Anchorage,  Alaska,  introduced  herself and  offered  to  answer                                                               
questions related to SB 121.                                                                                                    
SENATOR COGHILL  asked if the Department  of Law has had  to take                                                               
action to protect minors from financial fraud or identity theft.                                                                
MS. WILLIAMS replied  the Department of Law hasn't seen  a lot of                                                               
cases of  child ID  theft, but  the potential  is there  and some                                                               
consumers  have expressed  interest  in  extending credit  freeze                                                               
protection to minors.                                                                                                           
SENATOR COGHILL asked how families become aware of the issue.                                                                   
MS. WILLIAMS  explained that the companies  that have experienced                                                               
a data breach generally do  wide-spread notification, as required                                                               
by law. If  the stolen information is used to  engage in identity                                                               
theft, people  might not know  right away  and a minor  might not                                                               
know until they are older and apply for credit.                                                                                 
SENATOR  COGHILL  asked  if there  has  been  difficulty  holding                                                               
people accountable to the requirements  in Alaska law relating to                                                               
data breaches.                                                                                                                  
MS. WILLIAMS  offered her understanding that  consumers have been                                                               
notified  accordingly,  particularly  in  the  instances  of  the                                                               
larger data breaches.                                                                                                           
1:46:23 PM                                                                                                                    
CHAIR  MCGUIRE  asked  if  Alaska law  protects  people  who  are                                                               
intellectually challenged or  have a mental health  issue and are                                                               
moving into conservatorship status.                                                                                             
MS.  MORLEDGE  reported  that a  legally  appointed  guardian  or                                                               
conservator  of  an  incapacitated  individual  already  has  the                                                               
ability to place a credit freeze for that individual.                                                                           
CHAIR  MCGUIRE read  the final  paragraph of  the 10/8/2015  memo                                                               
from Megan  A. Wallace  that accompanied the  work order  for the                                                               
     Please  be  advised,  however, that  the  bill  may  be                                                                    
     construed  to   give  parents  and/or   minors  greater                                                                    
     protection than  is provided to other  adult consumers,                                                                    
     to the extent that credit  agencies are not required to                                                                    
     generate a report for adult  consumers who may not have                                                                    
     any credit  history. In this  regard, please  advise if                                                                    
     you  wish to  include  a provision  that would  require                                                                    
     credit  agencies to  generate a  credit report  for all                                                                    
     consumers who may not already  have a credit report for                                                                    
     the purpose of placing a security freeze.                                                                                  
She asked if the sponsor saw and considered it.                                                                                 
MS. MORLEDGE replied they did see  it and decided to maintain the                                                               
focus on  minors and others who  may have a guardian,  because it                                                               
wouldn't be  difficult for an  adult to do that  for him/herself.                                                               
However, the sponsor would be open to the discussion.                                                                           
CHAIR MCGUIRE said she'd give  members an opportunity to consider                                                               
the matter.                                                                                                                     
SENATOR COGHILL noted  that the credit reports  include a process                                                               
for placing a credit freeze.                                                                                                    
CHAIR MCGUIRE commented it might  be an outlier circumstance, but                                                               
it might be worth considering.                                                                                                  
1:50:51 PM                                                                                                                    
CHAIR  MCGUIRE  closed  public  testimony  and  held  SB  121  in                                                               
committee for further consideration.                                                                                            

Document Name Date/Time Subjects
SB 121 Alaska Personal Information Protection Act.pdf SJUD 2/8/2016 1:30:00 PM
SB 121
SB 121 Child ID Theft Report 2012.pdf SJUD 2/8/2016 1:30:00 PM
SB 121
SB 121 CyLab Child-Identity-Theft.pd.pdf SJUD 2/8/2016 1:30:00 PM
SB 121
SB 121 Fiscal Note.pdf SJUD 2/8/2016 1:30:00 PM
SB 121
SB 121 Laura Hughes Email.pdf SJUD 2/8/2016 1:30:00 PM
SB 121
SB 121 Laura Hughes Email.pdf SJUD 2/8/2016 1:30:00 PM
SB 121
SB 121 Legal Memo.pdf SJUD 2/8/2016 1:30:00 PM
SB 121
SB 121 NCSL Child Identity Theft State Laws.pdf SJUD 2/8/2016 1:30:00 PM
SB 121
SB 121 Sponsor Statement.pdf SJUD 2/8/2016 1:30:00 PM
SB 121
SB 121 State Security Freeze Laws.pdf SJUD 2/8/2016 1:30:00 PM
SB 121
SB0121A.pdf SJUD 2/8/2016 1:30:00 PM
SB 121
CSHB8.G.pdf SJUD 2/8/2016 1:30:00 PM
HB 8
Financial Exploitation statistics.pdf SJUD 2/8/2016 1:30:00 PM
HB8 Section Analysis-ver G Power of Attorney.pdf SJUD 2/8/2016 1:30:00 PM
HB 8
HB8 Supporting Documents - AARP letter.pdf SJUD 2/8/2016 1:30:00 PM
HB 8
HB8 Supporting Documents - AMAC.pdf SJUD 2/8/2016 1:30:00 PM
HB 8
HB8 Supporting Documents - Com on Aging letter.pdf SJUD 2/8/2016 1:30:00 PM
HB 8
HB8 Supporting Documents - LTCO.pdf SJUD 2/8/2016 1:30:00 PM
HB 8
HB8 Supporting Documents-Article AARP summary report.pdf SJUD 2/8/2016 1:30:00 PM
HB 8
HB8 Supporting Documents-Article Uniform Law Commission.pdf SJUD 2/8/2016 1:30:00 PM
HB 8
HB8 Supporting Documents-Articles multiple articles.pdf SJUD 2/8/2016 1:30:00 PM
HB 8
SCS CSHB8(HSS) Power of Attorney hearing request 1-29-2016.doc SJUD 2/8/2016 1:30:00 PM
HB 8
HB8fiscalNote. LAW.pdf SJUD 2/8/2016 1:30:00 PM
HB8fiscalNote. HSS.pdf SJUD 2/8/2016 1:30:00 PM
SB121fiscalNote.pdf SJUD 2/8/2016 1:30:00 PM
In support of SB 121- Crocker.msg SJUD 2/8/2016 1:30:00 PM
SB 121