HB651.DOC

SECTION 1. Cybercriminals target minors because their identities offer a clean slate with which to apply for bank accounts, credit cards, or loans. While adults can learn quickly that their identities have been stolen, it can take years for a minor to find out that they have been a victim of identity theft. Families often find out a child's identity was stolen when applying for college loans or scholarships, or after tax returns are filed in the child's name.

Adults can protect themselves from identity theft by placing a security freeze on their credit reports with credit reporting agencies such as Equifax, Experian, and Transunion. Placing a security freeze on a credit report means that any new creditor trying to open an account in an individual's name will not have access to that individual's credit report unless the individual requests removal of the security freeze.

However, minors must overcome two main hurdles. First, the majority of minors do not have an existing credit report to place a security freeze on. Second, many state statutes only allow an individual to place a security freeze on their own credit report and do not allow a parent, guardian, or other legal representative of a minor to place a security freeze on a credit report on behalf of the minor.

The purpose of this Act is to protect minors from the misuse of their personal financial information by those with the intent to defraud them by allowing parents and legal guardians to place a security freeze on a minor's credit report.

SECTION 2. Chapter 489P, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§489P- Security freeze for protected consumer; removal of security freeze; fees; applicability and scope. (a) A consumer reporting agency shall place a security freeze for a protected consumer if:

(1) The consumer reporting agency receives a request from the protected consumer's representative for the placement of the security freeze under this section; and

(2) The protected consumer's representative:

(A) Submits the request to the consumer reporting agency at the address or other point of contact and in the manner specified by the consumer reporting agency;

(B) Provides to the consumer reporting agency sufficient proof of identification of the protected consumer and the representative;

(C) Provides to the consumer reporting agency sufficient proof of authority to act on behalf of the protected consumer; and

(D) Pays to the consumer reporting agency a fee, if any, as provided in this section.

(b) If a consumer reporting agency does not have a credit report pertaining to a protected consumer when the consumer reporting agency receives a request under this section, the consumer reporting agency shall create a record for the protected consumer.

(c) Within thirty days after receiving a request pursuant to this section, a consumer reporting agency shall place a security freeze on the protected person's record or credit report.

(d) Unless a protected consumer security freeze is removed in accordance with this section, a consumer reporting agency may not release the protected consumer's credit report, any information derived from the protected consumer's credit report, or any record created for the protected consumer.

(e) The consumer reporting agency shall send a written confirmation of the security freeze to the representative within ten business days after instituting the security freeze on the credit report or record and shall provide the representative with instructions for removing the security freeze.

(f) A consumer reporting agency shall remove a security freeze from a protected consumer's credit report or record only under either of the following circumstances:

(1) A consumer reporting agency shall remove a security freeze within thirty days after receiving a request for removal from a protected consumer or the protected consumer's representative as follows:

(A) A representative submitting a request for removal shall provide all of the following:

(i) Sufficient proof of identification of the representative and sufficient proof of authority as determined by the consumer reporting agency; and

(ii) A fee as authorized under this section.

(B) A protected consumer submitting a request for removal shall provide all of the following:

(i) Sufficient proof of identification of the protected consumer as determined by the consumer reporting agency;

(ii) Documentation that the sufficient proof of authority of the protected consumer's representative to act on behalf of the protected consumer is no longer valid; and

(iii) A fee as authorized under this section; or

(2) A consumer reporting agency that intends to remove a security freeze under this subsection shall notify the representative and protected consumer in writing before removing the security freeze.

(g) A consumer reporting agency may charge a fee not exceeding $10 for each placement or removal of a security freeze on a protected consumer's record or credit report; provided that a consumer reporting agency may not charge any fee under this section if:

(1) The protected consumer's representative provides a copy of a police report to the consumer reporting agency alleging that the protected consumer has been a victim of an offense involving identity theft; or

(2) A request for the placement or removal of a security freeze is for a protected consumer who is under sixteen years of age at the time of the request and the consumer reporting agency has a credit report pertaining to the protected consumer.

(h) This section shall not apply to a protected consumer's credit report or record provided to persons listed in section 489P-3(l).

(i) As used in this section:

"Protected consumer" means an individual who is:

(1) Under the age of sixteen years at the time a request for the placement of a security freeze is made; or

(2) An incapacitated person or a protected person for whom a guardian or conservator has been appointed.

"Record" means a compilation of information that:

(1) Identifies a protected consumer;

(2) Is created by a consumer reporting agency solely for the purpose of complying with this chapter; and

(3) May not be created or used to consider the protected consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.

"Representative" means an individual who provides to a consumer reporting agency sufficient proof of authority to act on behalf of a protected consumer.

"Security freeze" means:

(1) If a consumer reporting agency does not have a credit report pertaining to a protected consumer, a restriction that:

(A) Is placed on the protected consumer's record in accordance with this section; and

(B) Prohibits the consumer reporting agency from releasing the protected consumer's record except as provided in this section; or

(2) If a consumer reporting agency has a credit report pertaining to the protected consumer, a restriction that:

(A) Is placed on the protected consumer's credit report in accordance with this section; and

(B) Prohibits the consumer reporting agency from releasing the protected consumer's credit report or any information derived from the protected consumer's credit report except as provided in this section.

"Sufficient proof of authority" means documentation that shows a representative has authority to act on behalf of a protected consumer, including:

(1) A court order granting custodianship, guardianship, or conservatorship;

(2) A birth certificate;

(3) A lawfully executed and valid power of attorney; or

(4) A written, notarized statement signed by a representative that expressly describes the authority of the representative to act on behalf of a protected consumer.

"Sufficient proof of identification" means documentation identifying a protected consumer or a representative including:

(1) A copy of a social security card;

(2) A certified or official copy of a birth certificate;

(3) A copy of a valid driver's license; or

(4) A copy of a government issued photo identification."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	651
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII