Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 764 entitled:

begs leave to report as follows:

The purpose of this measure is to authorize and establish procedures for the placement of a security freeze on credit reports by consumers who have been the victims of identity theft.

The Department of Commerce and Consumer Affairs, Department of the Prosecuting Attorney for the City and County of Honolulu, and Honolulu Police Department testified in support of this measure. The Consumer Data Industry Association opposed the measure and the Hawaii Bankers Association provided comments.

This measure establishes the Identity Theft Protection Act of 2005, which is intended to address the problem that occurs when a person's identity is stolen and new lines of credit are subsequently established in that person's name by the identity "thief". Your Committee finds that, in the last year, as many as seven million Americans have been the victims of fraudulently established credit accounts, and businesses have been burdened with up to $119,000,000,000 in related costs.

This measure enables victims of identity theft to place a "freeze" on the release of their credit history by credit reporting agencies to prevent the unauthorized use of this information to establish new lines of credit.

The security freeze prohibits a credit reporting agency from releasing any information without the consumer's express authorization, and until such time as the consumer has lifted the freeze. The consumer may lift the freeze as to specific third parties or for specific time periods to permit the authorized release of information, and the freeze does not apply in certain situations, such as when government agencies are seeking information pursuant to investigations related to child support, Medicaid fraud, or delinquent taxes. Violators are subject to the sanctions for unfair or deceptive trade acts or practices established in section 480-2, Hawaii Revised Statutes.

Your Committee has amended this measure by making technical changes for the purposes of clarity, consistency, and style, and to correct a statutory reference.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 764, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 764, S.D. 1, and be referred to the Committee on Judiciary and Hawaiian Affairs.