NO. 211.  AN ACT RELATING TO PLACING A SECURITY FREEZE ON A CREDIT REPORT.

(S.267)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  9 V.S.A. § 2480a is amended to read:

§ 2480a.  DEFINITIONS

For purposes of this subchapter:

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(7)  “Security freeze” means a notice placed in a credit report, at the request of the consumer who is a victim of identity theft, pursuant to section 2480h of this title.

Sec. 2.  9 V.S.A. § 2480b is amended to read:

§ 2480b.  DISCLOSURES TO CONSUMERS

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(c)  Any time a credit reporting agency is required to make a written disclosure to consumers pursuant to 15 U.S.C. § 1681g, it shall disclose, in at least 12 point type, and in bold type as indicated, the following notice:

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(3)  If you believe a law regulating consumer credit reporting has been violated, you may file a complaint with the Vermont Attorney General’s Consumer Assistance Program, 104 Morrill Hall, University of Vermont, Burlington, Vermont 05405.

Vermont Consumers Who Are Victims of Identity Theft

Have the Right to Obtain a Security Freeze

You may obtain a security freeze on your credit report at no charge if you are a victim of identity theft and you submit a copy of a police report, investigative report or complaint you have filed with a law enforcement agency about unlawful use of your personal information by another person.  You have a right to place a “security freeze” on your credit report pursuant to 9 V.S.A. § 2480h at no charge if you are a victim of identity theft.  All other Vermont consumers will pay a fee to the credit reporting agency of up to $10.00 to place the freeze on their credit report.  The security freeze will prohibit a credit reporting agency from releasing any information in your credit report without your express authorization.  A security freeze must be requested in writing by certified mail.

The security freeze is designed to help prevent credit, loans, and services from being approved in your name without your consent.  However, you should be aware that using a security freeze to take control over who gains access to the personal and financial information in your credit report may delay, interfere with, or prohibit the timely approval of any subsequent request or application you make regarding new loans, credit, mortgage, insurance, government services or payments, rental housing, employment, investment, license, cellular phone, utilities, digital signature, internet credit card transaction, or other services, including an extension of credit at point of sale.

When you place a security freeze on your credit report, within ten business days you will be provided a personal identification number or password to use if you choose to remove the freeze on your credit report or authorize the release of your credit report for a specific party, parties or period of time after the freeze is in place.  To provide that authorization, you must contact the credit reporting agency and provide all of the following:

(1)  The unique personal identification number or password provided by the credit reporting agency.

(2)  Proper identification to verify your identity.

(3)  The proper information regarding the third party or parties who are to receive the credit report or the period of time for which the report shall be available to users of the credit report.

A credit reporting agency may charge a fee of up to $5.00 to a consumer who is not a victim of identity theft to remove the freeze on your credit report or authorize the release of your credit report for a specific party, parties, or period of time after the freeze is in place.  For a victim of identity theft, there is no charge when the victim submits a copy of a police report, investigative report, or complaint filed with a law enforcement agency about unlawful use of the victim’s personal information by another person.

A credit reporting agency that receives a request from a consumer to lift temporarily a freeze on a credit report shall comply with the request no later than three business days after receiving the request.

A security freeze will not apply to “preauthorized approvals of credit.”  If you want to stop receiving preauthorized approvals of credit, you should call [INSERT PHONE NUMBERS] [ALSO INSERT ALL OTHER CONTACT INFORMATION FOR PRESCREENED OFFER OPT OUT.]

A security freeze does not apply to a person or entity, or its affiliates, or collection agencies acting on behalf of the person or entity with which you have an existing account that requests information in your credit report for the purposes of reviewing or collecting the account, provided you have previously given your consent to this use of your credit reports.  Reviewing the account includes activities related to account maintenance, monitoring, credit line increases, and account upgrades and enhancements.

You have a right to bring a civil action against someone who violates your rights under the credit reporting laws.  The action can be brought against a credit reporting agency or a user of your credit report.”

Sec. 3.  9 V.S.A. § 2480h(a) is amended to read:

(a)  Any Vermont consumer may place a security freeze on his or her credit report.  A credit reporting agency shall not charge a fee to victims of identity theft but may charge a fee of up to $10.00 to all other Vermont consumers for placing and $5.00 for removing, removing for a specific party or parties, or removing for a specific period of time after the freeze is in place a security freeze on a credit report.  A consumer who has been the victim of identity theft may place a security freeze on his or her credit report by making a request in writing by certified mail to a credit reporting agency with a valid copy of a police report, investigative report, or complaint the consumer has filed with a law enforcement agency about unlawful use of his or her personal information by another person.  A credit reporting agency shall not charge a fee for placing, removing, or removing for a specific party or parties a security freeze on a credit report  All other Vermont consumers may place a security freeze on his or her credit report by making a request in writing by certified mail to a credit reporting agency.  A security freeze shall prohibit, subject to the exceptions in subsection (l) of this section, the credit reporting agency from releasing the consumer’s credit report or any information from it without the express authorization of the consumer.  When a security freeze is in place, information from a consumer’s credit report shall not be released to a third party without prior express authorization from the consumer.  This subsection does not prevent a credit reporting agency from advising a third party that a security freeze is in effect with respect to the consumer’s credit report.

Sec. 4.  9 V.S.A. § 2480h(l)(10) is added to read:

(10)  Any property and casualty insurance company for use in setting or adjusting a rate or underwriting for property and casualty insurance purposes.

Sec. 5.  8 V.S.A. § 4704a is added to read:

4704a.  RERATING AFTER USE OF ERRONEOUS CREDIT

            INFORMATION

If it is determined through the reinvestigation process set forth in the federal Fair Credit Reporting Act, 15 U.S.C. § 1681i(a)(5), that credit information relied upon by an insurer was incorrect, and if an insurer receives notice of that determination from either the consumer-reporting agency or from the insured who has provided written documentation from the consumer-reporting agency, within one year of the date after the insured is no longer a customer of the insurer, such insurer shall reunderwrite and rerate the consumer within 30 days after receiving the notice.  After reunderwriting or rerating the insured the insurer shall make any adjustments necessary consistent with its underwriting and rating guidelines.  If an insurer determines that the insured has overpaid the premium the insurer shall refund to the insured the amount of overpayment.

Approved:  May 29, 2006