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First Substitute S.B. 39
This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on
Thu, Feb 10, 2005 at 3:59 PM by rday. -->
This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on
Fri, Feb 11, 2005 at 11:58 AM by rday. -->
Senator Carlene M. Walker proposes the following substitute bill:
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CONSUMER CREDIT PROTECTION
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2005 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Carlene M. Walker
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LONG TITLE
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General Description:
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This bill allows a consumer to place a security freeze on the consumer's credit report.
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Highlighted Provisions:
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This bill:
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. enacts the Consumer Credit Protection Act;
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. defines terms;
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. allows a consumer to place a security freeze on the consumer's credit report;
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. provides the method by which a consumer may:
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. place a security freeze on the consumer's credit report;
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. remove, permanently or temporarily, a security freeze; or
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. authorize release of the consumer's credit report to a specific person;
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. prohibits a consumer reporting agency from furnishing a consumer's credit report if
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the credit report is subject to a security freeze;
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. provides exceptions to the prohibition on a consumer reporting agency's furnishing
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of a credit report subject to a security freeze;
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. provides deadlines for a consumer reporting agency's response to a consumer's
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request for a security freeze;
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. requires a consumer reporting agency to make certain notifications to the consumer;
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. allows a consumer reporting agency to charge a reasonable fee for services related
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to the placement and removal of a security freeze;
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. provides exemptions for certain uses of credit reports; and
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. allows a civil action by a consumer damaged by a consumer reporting agency's
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noncompliance with the provisions of the Consumer Credit Protection Act.
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Monies Appropriated in this Bill:
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None
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Other Special Clauses:
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This bill takes effect on S. [
July
] May .S 1, 2006.
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Utah Code Sections Affected:
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ENACTS:
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13-41-101, Utah Code Annotated 1953
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13-41-102, Utah Code Annotated 1953
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13-41-201, Utah Code Annotated 1953
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13-41-202, Utah Code Annotated 1953
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13-41-203, Utah Code Annotated 1953
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13-41-204, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
13-41-101
is enacted to read:
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CHAPTER 41. CONSUMER CREDIT PROTECTION ACT
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Part 1. General Provisions
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13-41-101. Title.
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This chapter is known as the "Consumer Credit Protection Act."
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Section 2.
Section
13-41-102
is enacted to read:
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13-41-102. Definitions.
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As used in this chapter:
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(1) "Consumer" means a natural person residing in this state.
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(2) "Consumer reporting agency" means a person that, for a monetary fee, dues, or on a
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cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling
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or evaluating consumer credit information or other information about a consumer for the
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purpose of furnishing a credit report to a third person.
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(3) "Credit report" means a consumer report as defined in 15 U.S.C. Sec. 1681a ,
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except that "credit report" does not include
:
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(a) a motor vehicle record obtained from a state or an agency of a state; or
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(b) any information regarding an applicant's or insured's insurance claim history.
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(4) S. a .S "Proper identification" means S. [
a form of positive identification issued by a
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governmental entity that:
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(a) contains:
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(i) a numerical identifier; and
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(ii) a photograph of the person identified; and
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(b) may include:
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(i) a state identification card;
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(ii) a state driver license;
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(iii) a United States military identification card; or
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(iv) a United States passport.
] that information that is generally deemed sufficient to
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identify a person.
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(b) "Proper identification" may not be interpreted by a consumer reporting agency to
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include additional information about a consumer's employment, personal, or family history
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unless the information described in Subsection (4)(a) does not reasonably identify the
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consumer. .S
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(5) "Security freeze" means a prohibition, meeting the requirements of Section
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13-41-201
, on a consumer reporting agency's furnishing of a consumer's credit report.
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Section 3.
Section
13-41-201
is enacted to read:
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Part 2. Security Freeze
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13-41-201. Consumer reports -- Security freeze.
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(1) Except as provided in Subsection (3), a consumer may request that a security freeze
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be placed on that consumer's credit report if the consumer:
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(a) requests that the consumer reporting agency place a security freeze on the
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consumer's credit report:
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(i) in writing by certified mail; or
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(ii) by other reliable means S. that may be developed .S using telephone, fax, the
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Internet, or other electronic media;
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(b) pays a reasonable fee to the consumer reporting agency for placing a security
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freeze; and
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(c) provides proper identification to the consumer reporting agency.
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(2) (a) Except as provided in Subsection (3), a consumer reporting agency may not
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furnish a credit report to any person if the consumer who is the subject of the credit report
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requests a security freeze be placed on the credit report under Subsection (1).
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(b) A consumer reporting agency shall comply with a consumer's request under
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Subsection (1) within three business days after the day on which the request is received.
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(c) Within ten business days of the day on which the consumer reporting agency places
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a security freeze on the consumer's credit report, a consumer reporting agency shall send to the
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consumer:
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(i) written confirmation of the consumer's request under Subsection (1); and
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(ii) information explaining how the consumer may:
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(A) remove the security freeze under Subsection (4)(a)(i);
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(B) temporarily remove the security freeze under Subsection (4)(a)(ii); and
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(C) authorize a consumer reporting agency to furnish the consumer's credit report to a
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specific person under Subsection (4)(a)(iii).
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(d) Notwithstanding Subsection (1), in response to a request for a consumer's credit
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report that is subject to a security freeze, the consumer reporting agency may inform the
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requestor that the consumer's credit report is subject to a security freeze.
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S. (e) A consumer reporting agency may remove, temporarily or permanently, a security
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freeze from a consumer's credit report only in the following cases:
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(i) upon request by the consumer under Subsection (4); or
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(ii) if the security freeze is placed on the consumer's credit report based on a material
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misrepresentation of fact by the consumer.
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(f) (i) A material misrepresentation of fact under Subsection (2)(e)(ii) is a
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misrepresentation that the consumer makes in a request for a credit freeze in an attempt to
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defraud the consumer reporting agency.
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(ii) Before a consumer reporting agency may remove a security freeze from a
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consumer's credit report under Subsection (2)(e)(ii), the consumer reporting agency shall
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notify the consumer in writing that the security freeze will be removed. .S
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(3) Notwithstanding Subsections (1) and (2), a consumer reporting agency may furnish
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a credit report if the credit report:
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(a) is furnished to a person with whom the consumer who is the subject of the credit
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report has a debtor-creditor relationship, or to that person's subsidiary, affiliate, agent, or
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prospective assignee, for the purpose of:
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(i) reviewing an account, including for:
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(A) account maintenance;
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(B) account monitoring; or
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(C) a credit-line increase; S. or .S
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(ii) collecting a financial obligation owing; S. [
or
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(iii) extending credit to the consumer;
] .S
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(b) is requested by the consumer who is the subject of the report;
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(c) is furnished to a subsidiary, affiliate, agent, assignee, or prospective assignee of a
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person receiving a consumer's credit report under Section (4)(a)(iii);
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(d) is furnished pursuant to a court order;
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(e) is furnished to a federal, state, or local governmental entity, including a law
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enforcement agency;
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(f) is furnished to any authorized person for the purpose of investigating or collecting:
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(i) delinquent taxes;
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(ii) an unpaid judgment;
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(iii) an unpaid assessment under:
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(A) Title 11, Chapter 27, Utah Refunding Bond Act;
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(B) Title 17A, Special Districts; or
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(C) Title 54, Chapter 8, Utah Underground Conversion of Utilities Law; or
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(iv) unpaid interest or penalties;
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(g) is furnished to any person for prescreening under 15 U.S.C. Sec. 1681b(c);
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(h) is furnished to a credit monitoring service to which the consumer subscribes;
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(i) is furnished during a period in which the consumer has temporarily removed the
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security freeze; or
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(j) is furnished to a person specifically authorized to receive the credit report under
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Subsection (4)(a)(iii).
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(4) (a) Subject to the requirements of Subsection (4)(b), a consumer may:
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(i) remove the security freeze on that consumer's credit report by requesting that the
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consumer reporting agency remove the security freeze;
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(ii) temporarily remove the security freeze on that consumer's credit report by:
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(A) requesting that the consumer reporting agency remove the security freeze for a
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specific period of time; and
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(B) paying the fee allowed by Subsection (5); or
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(iii) authorize a consumer reporting agency to furnish the consumer's credit report to a
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specific person by:
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(A) requesting that the consumer reporting agency furnish the credit report to a specific
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person if that person request the credit report; and
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(B) paying the fee allowed by Subsection (5).
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(b) Any request or authorization under Subsection (4)(a)(i), (ii), or (iii) shall be made
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in writing by certified mail with proper identification accompanied by a personal identification
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number provided to the consumer by the consumer reporting agency.
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(c) A consumer reporting agency shall process a request or authorization under
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Subsection (4)(a)(i), (ii), or (iii) within three business days of the day on which the consumer
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reporting agency receives the request.
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(5) A consumer reporting agency may charge a consumer a reasonable fee to:
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(a) furnish a credit report under Subsection (3)(b), except as provided for in any other
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provision of law;
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(b) temporarily remove a security freeze under Subsection (4)(a)(ii);
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(c) allow the consumer to authorize the release of the consumer's credit report to a
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specific individual or entity under Subsection (4)(a)(iii); or
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(d) allow a consumer to place a security freeze under Subsection (1), except that a
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consumer reporting agency may not charge a fee for placing a security freeze if the person on
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whose credit report the security freeze is to be placed provides the consumer reporting agency
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with a copy of a police report indicating that the person is a victim of identity fraud.
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Section 4.
Section
13-41-202
is enacted to read:
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13-41-202. Exemptions.
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This chapter does not apply to:
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(1) (a) except as provided in Subsection (1)(b), a consumer reporting agency that acts
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only as a reseller of credit information that:
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(i) assembles and merges information contained in the database of another consumer
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reporting agency; and
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(ii) does not maintain a permanent database of credit information from which new
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consumer credit reports are produced
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(b) a consumer reporting agency that acts only as a reseller of credit information shall
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honor a security freeze placed on a consumer credit report by another consumer reporting
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agency;
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(2) a check service company that issues authorization for the purpose of approving or
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processing negotiable instruments, electronic funds transfers, or similar methods of payment;
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(3) a fraud prevention service company that issues reports concerning incidents of
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fraud;
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(4) A deposit account information service company that issues reports to inquiring
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banks or other financial institutions for use in reviewing a consumer's request for a demand
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deposit account at the inquiring bank or financial institution containing information concerning
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the requesting consumer's:
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(a) account closures based on fraud;
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(b) substantial overdrafts;
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(c) abuse of automatic teller machines; or
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(d) other similar negative information;
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(5) a person administering a credit file monitoring subscription service to which the
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consumer subscribes; or
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(6) a person requesting the consumer's credit report for use by an insurance business to
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set a rate or underwrite for insurance purposes, as those terms are defined in Section
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31A-1-301
.
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Section 5.
Section
13-41-203
is enacted to read:
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13-41-203. Effect of security freeze on third-party.
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If a person who requests a consumer's credit report in connection with an application
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for credit or other purpose is notified that a security freeze is in place on that credit report, the
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requesting person may treat the consumer's application as incomplete.
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Section 6.
Section
13-41-204
is enacted to read:
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13-41-204. Violation of security freeze -- Action by consumer.
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If a consumer reporting agency violates Section
13-41-201
, a consumer may bring a
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civil action to recover actual damages sustained by the consumer because of the violation.
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Section 7. Effective date.
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This bill takes effect on S. [
July
] May .S 1, 2006.
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