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New Tennessee law allows freezing credit reports

June 3rd, 2007 12:00 am by Hank Hayes



The FTC says that as many as 9 million Americans have their identities stolen each year.


A cornerstone of AARP's Tennessee legislative agenda - a bill to help protect consumers from the growing problem of identity theft - has passed the General Assembly.


Gov. Phil Bredesen has signed the Credit Security Act of 2007 to give people an opportunity to "freeze" their credit reports to prevent identity thieves from obtaining credit in a consumer's name.


"Identity theft is one of the fastest-growing crimes in the country, and this will help not only older Tennesseans but will help all generations protect their private information from thieves who want to steal their identity," AARP Tennessee President Margot Seay of Kingsport said of the legislation.


The Federal Trade Commission estimates that as many as 9 million Americans have their identities stolen each year.


A consumer report security freeze limits a consumer reporting agency from releasing a credit report or any information from the report without authorization from the consumer. If a person suspects that he or she has been victimized by identity theft, a consumer report security freeze can help the person track whether an identity thief is using the person's information to set up bogus accounts.


In addition, AARP said the bill will aim to protect individual Social Security numbers by requiring state business and governmental entities to make "reasonable efforts" to prevent disclosure.


AARP recently recognized the legislation's lead sponsors, House Majority Leader Gary Odom, D-Nashville, and state Sen. Raymond Finney, R-Maryville, during a bill signing ceremony that featured cutting a special frozen ice cream cake resembling a Social Security card.


AARP said the security freeze is the first main component of the bill.


"It gives Tennesseans the opportunity to voluntarily block access to their credit information," AARP's talking points about the bill said. "So if a thief gets your personal information, such as your Social Security number and date of birth, he can't buy a car or set up a credit card in your name. The car dealer or credit card company won't be able to get access to your credit report, and won't let the thief open a new credit account on your behalf."


The bill will give consumers the capability of temporarily lifting the security freeze within 15 minutes when they are ready to make a big purchase, buy insurance or open a new credit account, according to AARP.


Since 2001, 25 states have enacted laws that allow security freezes. Security freeze laws in Hawaii, Kansas, Maine, South Dakota, Texas, Vermont and Washington are limited to identity theft victims, while the other states give all consumers the option to place a freeze on their credit history, according to the National Conference of State Legislatures.


The legislation's second component is protecting Social Security numbers.


"It asks businesses and nonprofit agencies to do reasonable, common-sense things to keep thieves from getting them," AARP said. "Social Security numbers will no longer be allowed to be publicly posted, printed on membership cards, or required as user names for logging into Web sites. We wanted state and local governments to come under this but found it would be too expensive to change computer systems for TennCare (the state's expanded Medicaid program) and other agencies in order to do it this year. The bill does call for a comptroller's report on how we can best go about bringing governments under this next year."


The bill also will allow each of the three major credit bureaus to charge a one-time set-up fee of $7.50, up from $5, for the freeze protection. Electronic sign-up for the freeze will be delayed until Jan. 31, 2009. Mail-in applications can still start Sept. 1, 2008, according to AARP.


AARP added that TennCare contractors will be exempt from the Social Security number protection provisions because some of their practices in this area can't be changed for a couple of years, including recording Social Security numbers on pharmacy cards.


For more about the bill go to www.legislature.state.tn.us and click on "Legislation." The bill's number is SB 161.



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