Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 655 entitled:

begs leave to report as follows:

The purpose of this bill is to protect identity theft victims from further fraud by allowing them to place a "security freeze" on their credit reports which prohibits a credit reporting agency from releasing any information without the consumer's express authorization.

Testimony in support of this bill was submitted by the Department of Commerce and Consumer Affairs, Department of the Honolulu Prosecuting Attorney, and Honolulu Police Department. The Consumer Data Industry Association opposed this bill. The Hawaii Bankers Association commented on the bill.

Your Committee finds that this measure is designed to address one form of identity theft that occurs when an individual steals a consumer's identity and uses this information to open new lines of credit. A security freeze is a way to prevent a perpetrator from opening an account in the victim's name, and will assist in minimizing the damages suffered by identity theft victims and the financial losses suffered by commercial institutions.

While your Committee recognizes that this measure has value in preventing fraud and protecting consumers, the bill fails to address several issues. These include:

In light of these concerns, your Committee has amended this bill by:

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 655, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 655, H.D. 1, and be referred to the Committee on Judiciary.