ASSEMBLY CONSUMER AFFAIRS COMMITTEE

STATEMENT TO

ASSEMBLY, No. 1096

STATE OF NEW JERSEY

DATED:  MAY 7, 2018

      The Assembly Consumer Affairs Committee reports favorably Assembly Bill No. 1096.

      As reported by the committee, this bill authorizes a parent or legal guardian to place a security freeze on a child’s consumer report.

     Specifically, the bill defines a consumer under 18 years of age as a “protected consumer.”  The security freeze would prohibit a consumer reporting agency (CRA) from releasing the report or any information in it without the express authorization of the protected consumer’s parent or legal guardian, thereby aiding in the prevention of child identity theft.

     Under the bill, a security freeze may be placed on a protected consumer’s report at the request of the protected consumer’s parent or legal guardian, in the same manner as a consumer requesting a freeze on her or his own report under the “Identity Theft Prevention Act,” P.L.2005, c.226 (C.56:11-44 et al.).  A parent or legal guardian would be required to provide a CRA with sufficient proof of authority to act on behalf of a protected consumer.  If the CRA does not have any information in its files pertaining to the protected consumer at the time it receives a request, the CRA would create a record for the protected consumer and place a security freeze on it.  The record would consist of a compilation of information created by the CRA that identifies the protected consumer.  A CRA would be prohibited from creating or using the record to consider the protected consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.

     The CRA would send a written confirmation of the security freeze to the protected consumer’s parent or legal guardian within five business days of placing the freeze and provide her or him with a unique personal identification number or password to be used when providing authorization for the release of the protected consumer’s credit for a specific party or period of time.

     The bill provides that a security freeze is to remain in place until the protected consumer’s parent or legal guardian requests that the security freeze be removed or the protected consumer reaches 18 years of age.  A CRA would remove the security freeze within three business days of the request, upon receiving: (1) proper identification and sufficient proof of authority from the protected consumer’s parent or legal guardian to act on behalf of the protected consumer; and (2) the unique personal identification number or password provided by the CRA.

     Under current law, a CRA is required to place a security freeze on a consumer report no later than five business days after receiving a written request, and is prohibited from charging any fee to place the security freeze on a consumer report.  A CRA is authorized to charge a reasonable fee, not to exceed $5, for removing or temporarily lifting a security freeze on that consumer report.  A person may be charged a reasonable fee, not to exceed $5, for failing to retain the original personal identification number provided by the CRA.  These provisions would remain unchanged.

      This bill was pre-filed for introduction in the 2018-2019 session pending technical review.  As reported, the bill includes the changes required by technical review, which has been performed.