NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5126
SPONSOR: Solages
 
TITLE OF BILL:
An act to amend the general business law, in relation to implementing
provisions to protect credit reports of certain consumers
 
PURPOSE::
To authorize specified representatives to request a security freeze on
the consumer credit report of children under the age of 16 and individ-
uals under guardianship; to requires a consumer credit reporting agency
to place a security freeze for a specified protected consumer under
specified circumstances and within a specified period of time; to
authorize a consumer credit reporting agency to create a credit report
for a protected consumer who does not have a credit report.
 
SUMMARY::
Section 1. Amends subdivision (m) of section 380-a Of the general busi-
ness law, as added by chapter 63 of the laws of 2006.
Section 2. Amends section 380-a of the ge,neral business law is amended
by adding five new subdivisions (v), (w), (x), (y) and (z).
Section 3. Amends section 380-v of the general business law, as relet-
tered by chapter 441 of the laws of 2014, is relettered section 380-w
and a new section 380-v is added.
Section 4. Sets the effective date.
 
JUSTIFICATION::
At a time when identity theft is an increasing threat to New Yorkers,
children and those unable to care for themselves face an even greater
risk of having their identity stolen. Under current state law, credit
agencies must place a security freeze on the credit of anyone who
requests it. However, they can refuse to freeze the credit of those who
do not have a pre-existing credit report. When credit bureaus collect
data for people applying for credit from lending partners, they get a
name and social security number, but they don't have data to double
check someone's actual age due to a lack of information sharing between
credit reporting agencies and the Social Security Administration.
Since most children do not have a line of credit or other credit histo-
ry, they do not have a preexisting credit report. Thus, the only way a
credit report can be created is if the child opens a line of credit,
which is unlikely, or someone fraudulently opens a line of credit under
their name and social security number, which is becoming increasingly
common. A study releaied last year by ID Analytics, a California-based
consumer risk management firm, found that about 140,000 identity frauds
against minors occur each year. Additionally, a study by researchers at
Carnegie Mellon found that children are more likely than adults to be
targeted for identity theft. Parents cannot protect their children from
identity theft and sometimes, a child won't even realize they have been
the victim of identity theft until years later when they try to get a
loan or open a credit card account.
This legislation would seek to correct this problem by requiring consum-
er credit reporting agencies to create a credit report for a child under
16 years of age when requested by the child's parent or guardian. The
child's representative could also place a security freeze on the child's
credit report, which will allow parents to be proactive in protecting
their children from identity theft. In addition, these same protections
will be provided to incapacitated individuals under the care of a guar-
dianship.
 
RACIAL JUSTICE IMPACT: TBD.
 
GENDER JUSTICE IMPACT: TBD.
 
LEGISLATIVE HISTORY::
2023-24: A8065; referred to consumer affairs and protection.
2021-22: A5256; referred to consumer affairs and protection.
2019-20: A2746; referred to consumer affairs and protection.
2017-18: A7682; referred to consumer affairs and protection.
 
FISCAL IMPLICATIONS::
None.
 
EFFECTIVE DATE::
This act shall take effect on the ninetieth day after it shall have
become a law.