Shurhire Employment Law Page AB 655

BILL NUMBER: AB 655 CHAPTERED
BILL TEXT

CHAPTER 354
FILED WITH SECRETARY OF STATE SEPTEMBER 27, 2001
APPROVED BY GOVERNOR SEPTEMBER 26, 2001
PASSED THE ASSEMBLY SEPTEMBER 6, 2001
PASSED THE SENATE SEPTEMBER 4, 2001
AMENDED IN SENATE AUGUST 28, 2001
AMENDED IN SENATE AUGUST 20, 2001
AMENDED IN SENATE JUNE 20, 2001
AMENDED IN ASSEMBLY MAY 15, 2001
AMENDED IN ASSEMBLY MAY 3, 2001
AMENDED IN ASSEMBLY APRIL 17, 2001

INTRODUCED BY Assembly Member Wright

FEBRUARY 22, 2001

An act to amend Sections 1785.10, 1785.16, 1786, 1786.2, 1786.10,
1786.11, 1786.16, 1786.18, 1786.20, 1786.24, 1786.26, 1786.28,
1786.50, and 1786.52 of, to add Sections 1785.11.8, 1785.16.1,
1785.16.2, 1785.20.3, 1786.29, and 1786.53 to, to add Title 1.81.3
(commencing with Section 1798.92) to Part 4 of Division 3 of, and to
repeal Article 3 (commencing with Section 1786.40) of Title 1.6A of
Part 4 of Division 3 of, the Civil Code, relating to personal
identifying information.

LEGISLATIVE COUNSEL'S DIGEST

AB 655, Wright. Personal identifying information: identity theft.
Existing law requires consumer credit report agencies to allow a consumer to elect to have his or her name removed from any list provided by the consumer credit reporting agencies for firm offers of credit that are not initiated by the consumer, as specified. This bill would permit a consumer to specify, either verbally or in writing, that his or her name shall be removed from lists that a consumer credit reporting agency furnishes for credit card solicitations for a minimum of two years, and that consumer credit reporting agencies would be required to inform a consumer of this option, as specified.

Existing law provides a process by which a consumer may dispute the accuracy of information in a consumer credit report. Existing law requires a consumer credit reporting agency to promptly and permanently block certain information when a consumer provides a valid copy of a police report indicating that another person has unlawfully used the consumer's personal identifying information.

This bill additionally would require a consumer credit reporting agency to promptly and permanently block certain information when a consumer provides a valid copy of a Department of Motor Vehicles investigative report indicating that another person has unlawfully used the consumer's personal identifying information. The bill would set forth requirements regarding the unblocking of certain information by a consumer reporting agency after an allegation of identity theft by a consumer, and would permit a consumer reporting agency to disregard a consumer's version of disputed information, as specified.

This bill would also require that a consumer credit reporting agency delete from a consumer credit report inquiries for credit reports that were initiated as the result of identity theft.

Existing law places certain requirements on users of consumer credit reports, including the right of the consumer to prohibit the use of information in a consumer's files in connection with credit
transactions not initiated by the consumer.

This bill would require any person who uses a consumer credit report in connection with a credit transaction and who discovers that the address on the consumer credit report does not match the address of the consumer requesting or being offered credit to take reasonable steps to verify the accuracy of the consumer's address, as specified, and confirm that the credit transaction is not the result of defined identity theft.

This bill would create similar requirements for any person who uses a consumer credit report in
connection with a credit transaction and who receives specified notification from a consumer credit reporting agency that information in the report has been blocked as the result of an identity theft.

This bill would provide that a consumer damaged by a failure to fulfill the above described requirements would have a claim against the person using the report, as specified.

Existing law restricts the dissemination of certain types of personal identifying information by specific professions and businesses. Existing law also provides, generally, that a consumer is not liable on debt incurred by a 3rd party, and limits a consumer's liability on the unauthorized use of a credit card, as defined.

This bill would allow a person to bring a cause of action against a claimant to establish that the person is a victim of identity theft, as defined; or if the claimant has brought a cause of action to recover on its claim, the bill would allow the person to file a cross complaint to establish that the person is a victim of identity
theft in connection with the claim.

This bill would allow the victim to obtain a judgment that, among other things, declares the victim is not obligated on these claims, that declares void any security interests in the victim's property, that provides for an injunction restraining attempts to collect on these claims, that may include actual damages and equitable relief as the court deems appropriate, that may include a civil penalty up to $30,000 and that awards reasonable attorney's fees and costs.

This bill would allow the victim to join any person purporting to have a claim that the victim maintains arises from identity theft in the action regardless of whether those claims arise out of the same transaction or occurrence.

The bill would also provide for continuing jurisdiction in these actions and the limitation on bringing actions or joining defendants with respect to the action.

Existing law regulates the activities of investigative consumer reporting agencies, as specified.

This bill would revise and recast various provisions governing the activities of investigative consumer reporting agencies. Among other things, it would expand the definition of "investigative consumer reporting agency," increase disclosure requirements, eliminate certain exemptions, increase penalties for violations, and would make related changes.

The bill would prohibit creditors from selling a consumer debt to a debt collector, except as specified, if the consumer's file with a consumer credit reporting agency is blocked or the creditor has reason to believe the consumer is a victim of identity theft. The bill would also prohibit persons who gather specified information on a consumer in lieu of using the services of an investigative consumer reporting agency to provide that information to the consumer.

This bill would incorporate additional changes in Section 1785.10 of the Civil Code proposed by AB 488 to become operative only if this bill and AB 488 are both enacted on or before January 1, 2002, each
bill amends Section 1785.10 of the Civil Code, and this bill is enacted last.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 1785.10 of the Civil Code is amended to read: 1785.10.

(a) Every consumer credit reporting agency shall, upon request and proper identification of any consumer, allow the consumer to visually inspect all files maintained regarding that consumer at the time of the request.

(b) Every consumer reporting agency, upon contact by a consumer by telephone, mail, or in person regarding information which may be contained in the agency files regarding that consumer, shall promptly advise the consumer of his or her rights under Sections 1785.11.8, 1785.19, and 1785.19.5, and of the obligation of the agency to provide disclosure of the files in person, by mail, or by telephone pursuant to Section 1785.15, including the obligation of the agency to provide a decoded written version of the file or a written copy of the file with an explanation of any code, including any credit score used, and the key factors, as defined in Section 1785.15.1, if the consumer so requests that copy. The disclosure shall be provided in the manner selected by the consumer, chosen from among any reasonable means available to the consumer credit reporting agency. The agency shall determine the applicability of subdivision (1) of Section 1785.17 and, where applicable, the agency shall inform the consumer of the rights under that section.

(c) All information on a consumer in the files of a consumer credit reporting agency at the time of a request for inspection under subdivision (a), shall be available for inspection, including the names and addresses of the sources of information.

(d) (1) The consumer credit reporting agency shall also disclose the recipients of any consumer credit report on the consumer which the consumer credit reporting agency has furnished:

(A) For employment purposes within the two-year period preceding the request.

(B) For any other purpose within the 12-month period preceding the request.

(2) Disclosure of recipients of consumer credit reports for purposes of this subdivision shall include the name of the recipient or, if applicable, the fictitious business name under which the recipient does business disclosed in full. If requested by the consumer, the identification shall also include the address of the
recipient.

(e) The consumer credit reporting agency shall also disclose a record of all inquiries received by the agency in the 12-month period preceding the request that identified the consumer in connection with a credit transaction which is not initiated by the consumer. This record of inquiries shall include the name of each recipient making an inquiry.

SEC. 1.5. Section 1785.10 of the Civil Code is amended to read: 1785.10. (a) Every consumer credit reporting agency shall, upon request and proper identification of any consumer, allow the consumer to visually inspect all files maintained regarding that consumer at the time of the request.

(d) (1) The consumer credit reporting agency shall also disclose the recipients of any consumer credit report on the consumer which the consumer credit reporting agency has furnished:

(A) For employment purposes within the two-year period preceding the request.

(B) For any other purpose within the 12-month period preceding the request. (2) Disclosure of recipients of consumer credit reports for purposes of this subdivision shall include the name of the recipient or, if applicable, the fictitious business name under which the recipient does business disclosed in full. The identification shall also include the address and, if provided by the recipient, the telephone number identified for customer service for the recipient.

(f) Any consumer credit reporting agency when it is subject to the provisions of Section 1785.22 is exempted from the requirements of subdivisions (c), (d), and (e), only with regard to the provision of
the address and telephone number.

(g) Any consumer credit reporting agency, that provides a consumer credit report to another consumer credit reporting agency that procures the consumer credit report for the purpose of resale and is subject to Section 1785.22, is exempted from the requirements of subdivisions (d) and (e), only with regard to the provision of the address and telephone number regarding each prospective user to which the consumer credit report was sold.

SEC. 2. Section 1785.11.8 is added to the Civil Code, to read: 1785.11.8. A consumer may elect that his or her name shall be removed from any list that a consumer credit reporting agency furnishes for credit card solicitations, by notifying the consumer credit reporting agency, by telephone or in writing, pursuant to the
notification system maintained by the consumer credit reporting agency pursuant to subdivision (d) of Section 1785.11. The election shall be effective for a minimum of two years, unless otherwise specified by the consumer.

SEC. 3. Section 1785.16 of the Civil Code is amended to read: 1785.16. (a) If the completeness or accuracy of any item of information contained in his or her file is disputed by a consumer, and the dispute is conveyed directly to the consumer credit reporting agency by the consumer or user on behalf of the consumer, the consumer credit reporting agency shall within a reasonable period of time and without charge, reinvestigate and record the current status of the disputed information before the end of the 30-business-day period beginning on the date the agency receives notice of the dispute from the consumer or user, unless the consumer credit reporting agency has reasonable grounds to believe and determines that the dispute by the consumer is frivolous or irrelevant, including by reason of a failure of the consumer to provide sufficient information, as requested by the consumer credit reporting agency, to investigate the dispute. Unless the consumer credit reporting agency determines that the dispute is frivolous or irrelevant, before the end of the five-business-day period beginning on the date the consumer credit reporting agency receives notice of
dispute under this section, the agency shall notify any person who provided information in dispute at the address and in the manner specified by the person. A consumer credit reporting agency may require that disputes by consumers be in writing.

(b) In conducting that reinvestigation the consumer credit reporting agency shall review and consider all relevant information submitted by the consumer with respect to the disputed item of information. If the consumer credit reporting agency determines that the dispute is frivolous or irrelevant, it shall notify the consumer by mail or, if authorized by the consumer for that purpose, by any other means available to the consumer credit reporting agency, within five business days after that determination is made that it is terminating its reinvestigation of the item of information. In this notification, the consumer credit reporting agency shall state the specific reasons why it has determined that the consumer's dispute is frivolous or irrelevant. If the disputed item of information is found to be inaccurate, missing, or can no longer be verified by the evidence submitted, the consumer credit reporting agency shall promptly add, correct, or delete that information from the consumer's file.

(c) No information may be reinserted in a consumer's file after having been deleted pursuant to this section unless the person who furnished the information certifies that the information is accurate. If any information deleted from a consumer's file is reinserted in the file, the consumer credit reporting agency shall promptly notify the consumer of the reinsertion in writing or, if authorized by the consumer for that purpose, by any other means available to the consumer credit reporting agency. As part of, or in addition to, this notice the consumer credit reporting agency shall, within five business days of reinserting the information, provide the consumer in writing (1) a statement that the disputed information has been reinserted, (2) a notice that the agency will provide to the consumer, within 15 days following a request, the name, address, and telephone number of any furnisher of information contacted or which contacted the consumer credit reporting agency in connection with the reinsertion, (3) the toll-free telephone number of the consumer credit reporting agency that the consumer can use to obtain this name, address, and telephone number, and (4) a notice that the consumer has the right to a reinvestigation of the information reinserted by the consumer credit reporting agency and to add a statement to his or her file disputing the accuracy or completeness of the information.

(d) A consumer credit reporting agency shall provide written notice to the consumer of the results of any reinvestigation under this subdivision, within five days of completion of the reinvestigation. The notice shall include (1) a statement that the reinvestigation is completed, (2) a consumer credit report that is based on the consumer's file as that file is revised as a result of the reinvestigation, (3) a description or indication of any changes made in the consumer credit report as a result of those revisions to the consumer's file and a description of any changes made or sought by the consumer that were not made and an explanation why they were not made, (4) a notice that, if requested by the consumer, a description of the procedure used to determine the accuracy and completeness of the information shall be provided to the consumer by the consumer credit reporting agency, including the name, business address, and telephone number of any furnisher of information contacted in connection with that information, (5) a notice that the consumer has the right to add a statement to the consumer's file disputing the accuracy or completeness of the information, (6) a notice that the consumer has the right to request that the consumer credit reporting agency furnish notifications under subdivision (h),

(7) a notice that the dispute will remain on file with the agency as long as the credit information is used, and (8) a statement about the details of the dispute will be furnished to any recipient as long as the credit information is retained in the agency's data base. A consumer credit reporting agency shall provide the notice pursuant to this subdivision respecting the procedure used to determine the accuracy and completeness of information, not later than 15 days after receiving a request from the consumer.

(e) The presence of information in the consumer's file that contradicts the contention of the consumer shall not, in and of itself, constitute reasonable grounds for believing the dispute is frivolous or irrelevant.

(f) If the consumer credit reporting agency determines that the dispute is frivolous or irrelevant, or if the reinvestigation does not resolve the dispute, or if the information is reinserted into the consumer's file pursuant to subdivision (c), the consumer may file a brief statement setting forth the nature of the dispute. The consumer credit reporting agency may limit these statements to not more than 100 words if it provides the consumer with assistance in writing a clear summary of the dispute.

(g) Whenever a statement of dispute is filed, the consumer credit reporting agency shall, in any subsequent consumer credit report containing the information in question, clearly note that the information is disputed by the consumer and shall include in the report either the consumer's statement or a clear and accurate
summary thereof.

(h) Following the deletion of information from a consumer's file pursuant to this section, or following the filing of a statement of dispute pursuant to subdivision (f), the consumer credit reporting agency, at the request of the consumer, shall furnish notification that the item of information has been deleted or that the item of information is disputed. In the case of disputed information, the notification shall include the statement or summary of the dispute filed pursuant to subdivision (f).

This notification shall be furnished to any person designated by the consumer who has, within
two years prior to the deletion or the filing of the dispute, received a consumer credit report concerning the consumer for employment purposes, or who has, within 12 months of the deletion or the filing of the dispute, received a consumer credit report concerning the consumer for any other purpose, if these consumer credit reports contained the deleted or disputed information. The consumer credit reporting agency shall clearly and conspicuously disclose to the consumer his or her rights to make a request for this notification.

The disclosure shall be made at or prior to the time the information is deleted pursuant to this section or the consumer's statement regarding the disputed information is received pursuant to subdivision (f).

(i) A consumer credit reporting agency shall maintain reasonable procedures to prevent the reappearance in a consumer's file and in consumer credit reports of information that has been deleted pursuant
to this section and not reinserted pursuant to subdivision (c).

(j) If the consumer's dispute is resolved by deletion of the disputed information within three business days, beginning with the day the consumer credit reporting agency receives notice of the dispute in accordance with subdivision (a), and provided that verification thereof is provided to the consumer in writing within five business days following the deletion, then the consumer credit reporting agency shall be exempt from requirements for further action under subdivisions (d), (f), and (g).

(k) If a consumer submits to a credit reporting agency a copy of a valid police report, or a valid investigative report made by a Department of Motor Vehicles investigator with peace officer status, filed pursuant to

Section 530.5 of the Penal Code, the consumer credit reporting agency shall promptly and permanently block
reporting any information that the consumer alleges appears on his or her credit report as a result of a violation of Section 530.5 of the Penal Code so that the information cannot be reported.

The consumer credit reporting agency shall promptly notify the furnisher of the information that the information has been so blocked. Furnishers of information and consumer credit reporting agencies shall ensure that information is unblocked only upon a preponderance of the evidence establishing the facts required under paragraph (1), (2), or (3).

The permanently blocked information shall be unblocked only if: (1) the information was blocked due to a material misrepresentation of fact by the consumer or fraud, or (2) the consumer agrees that the blocked information, or portions of the blocked information, were blocked in error, or (3) the consumer knowingly obtained possession of goods, services, or moneys as a result of the blocked transaction or transactions or the consumer should have known that he or she obtained possession of goods, services, or moneys as a result of the blocked transaction or transactions.

If blocked information is unblocked pursuant to this subdivision, the consumer shall be promptly notified in the same manner as consumers are notified of the reinsertion of information pursuant to subdivision (c). The prior presence of the blocked information in the consumer credit reporting agency's file on the consumer is not evidence of whether the consumer knew or should have known that he or she obtained possession of any goods, services, or moneys. For the purposes of this subdivision, fraud may be demonstrated by circumstantial evidence.

In unblocking information pursuant to this subdivision, furnishers and consumer credit reporting agencies shall be subject to their respective requirements pursuant to this title regarding the completeness and
accuracy of information.

(l) In unblocking information as described in subdivision (k), a consumer reporting agency shall comply with all requirements of this section and 15 U.S.C. Sec. 1681i relating to reinvestigating disputed information. In addition, a consumer reporting agency shall accept the consumer's version of the disputed information and correct or delete the disputed item when the consumer submits to the consumer reporting agency documentation obtained from the source of the item in dispute or from public records confirming that the report was inaccurate or incomplete, unless the consumer reporting agency, in the exercise of good faith and reasonable judgment, has substantial reason based on specific, verifiable facts to doubt the authenticity of the documentation submitted and notifies the consumer in writing of that decision, explaining its reasons for unblocking the information and setting forth the specific, verifiable facts on which the decision was based. (m) Any provision in a contract that prohibits the disclosure of a credit score by a person who makes or arranges loans or a consumer credit reporting agency is void. A lender shall not have liability under any contractual provision for disclosure of a credit score.

SEC. 4. Section 1785.16.1 is added to the Civil Code, to read: 1785.16.1. A consumer credit reporting agency shall delete from a consumer credit report inquiries for credit reports based upon credit requests that the consumer credit reporting agency verifies were initiated as the result of identity theft, as defined in Section 1798.92. SEC. 4.5. Section 1785.16.2 is added to the Civil Code, to read: 1785.16.2. (a) No creditor may sell a consumer debt if the consumer's file with a consumer credit reporting agency is blocked with respect to that debt pursuant to subdivision (k) of Section 1785.16, or if the consumer has provided the creditor with sufficient information in writing that the consumer is not obligated to pay the debt because he or she is a victim of identity theft, as defined in subdivision (d) of Section 1798.92, for the creditor to have reasonable grounds to determine that consumer's statement of identity
theft is not frivolous.

(b) Subdivision (a) does not apply to a creditor's sale of a debt to a subsidiary or affiliate of the creditor.
SEC. 5. Section 1785.20.3 is added to the Civil Code, to read: 1785.20.3. (a) Any person who uses a consumer credit report in connection with a credit transaction, and who discovers that the address on the consumer credit report does not match the address of the consumer requesting or being offered credit, shall take reasonable steps to verify the accuracy of the consumer's address, and shall either communicate to consumer by telephone, or write the consumer, to confirm that the credit transaction is not the result of identity theft, as defined in Section 1798.90.

(b) Any person who uses a consumer credit report in connection with a credit transaction, and who receives a clearly identifiable notification, consisting of more than a tradeline, from a consumer credit reporting agency that information in the report has been blocked pursuant to Section 1785.16 as the result of an identity theft, shall not lend money or extend credit without taking reasonable steps to verify the consumer's identity and to confirm that the credit transaction is not the result of identity theft.

(c) Any consumer who suffers damages as a result of a violation of this section by any person may bring an action in a court of appropriate jurisdiction against that person to recover actual damages, court costs, attorney's fees, and punitive damages of not more than thirty thousand dollars ($30,000) for each violation, as the court deems proper.

(d) As used in this section, "identity theft" has the meaning given in Section 1798.90. SEC. 6. Section 1786 of the Civil Code is amended to read: 1786. The Legislature finds and declares as follows: (a) Investigative consumer reporting agencies have assumed a vital role in collecting, assembling, evaluating, compiling, reporting, transmitting, transferring, or communicating information on consumers for employment and insurance purposes, and for purposes relating to the hiring of dwelling units, subpoenas and court orders, licensure, and other lawful purposes.

(b) There is a need to insure that investigative consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy. (c) The crime of identity theft in this new computer era has exploded to become the fastest growing white collar crime in America.

(d) The unique nature of this crime means it can often go undetected for years without the victim being aware his identity has been misused. (e) Because notice of identity theft is critical before the victim can take steps to stop and prosecute this crime, consumers are best protected if they are automatically given copies of any investigative
consumer reports made on them.

(f) It is the purpose of this title to require that investigative consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for employment, insurance information, and information relating to the hiring of dwelling units in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of the information in accordance with the requirements of this title.

(g) The Legislature hereby intends to regulate investigative consumer reporting agencies pursuant to this title in a manner which will best protect the interests of the people of the State of California.

SEC. 7. Section 1786.2 of the Civil Code is amended to read: 1786.2. The following terms as used in this title have the meaning expressed in this section: (a) The term "person" means any individual, partnership, corporation, limited liability company, trust, estate, cooperative, association, government or governmental subdivision or agency, or
other entity. The term "person" as used in this title shall not be construed to require duplicative reporting by any individual, corporation, trust, estate, cooperative, association, government, or governmental subdivision or agency, or other entity involved in the same transaction.

(b) The term "consumer" means a natural individual who has made application to a person for employment purposes, for insurance for personal, family, or household purposes, or the hiring of a dwelling
unit, as defined in subdivision (c) of Section 1940.

(c) The term "investigative consumer report" means a consumer report in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through any means. The term does not include a consumer report or other compilation of information that is limited to specific factual
information relating to a consumer's credit record or manner of obtaining credit obtained directly from a creditor of the consumer or from a consumer reporting agency when that information was obtained directly from a potential or existing creditor of the consumer or from the consumer. Notwithstanding the foregoing, for transactions between investigative consumer reporting agencies and insurance institutions, agents, or insurance-support organizations subject to Article 6.6 (commencing with Section 791) of Chapter 1 of Part 2 of Division 1 of the Insurance Code, the term "investigative consumer report" shall have the meaning set forth in subdivision (n) of Section 791.02 of the Insurance Code.

(d) The term "investigative consumer reporting agency" means any person who, for monetary fees or dues, engages in whole or in part in the practice of collecting, assembling, evaluating, compiling, reporting, transmitting, transferring, or communicating information concerning consumers for the purposes of furnishing investigative consumer reports to third parties, but does not include any governmental agency whose records are maintained primarily for traffic safety, law enforcement, or licensing purposes, or any licensed insurance agent, insurance broker, or solicitor, insurer, or life insurance agent.

(e) The term "file," when used in connection with information on any consumer, means all of the information on that consumer recorded and retained by an investigative consumer reporting agency regardless of how the information is stored.

(f) The term "employment purposes," when used in connection with an investigative consumer report, means a report used for the purpose of evaluating a consumer for employment, promotion, reassignment, or retention as an employee.

(g) The term "medical information" means information on a person's medical history or condition obtained directly or indirectly from a licensed physician, medical practitioner, hospital, clinic, or other medical or medically related facility.

SEC. 8. Section 1786.10 of the Civil Code is amended to read: 1786.10. (a) Every investigative consumer reporting agency shall, upon request and proper identification of any consumer, allow the consumer to visually inspect all files maintained regarding the consumer at the time of the request.

(b) All items of information shall be available for inspection, except that the sources of information, other than public records and records from data bases available for sale, acquired solely for use in preparing an investigative consumer report and actually used for no other purpose need not be disclosed. However, if an action is brought under this title, those sources shall be available to the consumer under appropriate discovery procedures in the court in which the action is brought. Nothing in this title shall be interpreted to mean that investigative consumer reporting agencies are required to divulge to consumers the sources of investigative consumer reports except in appropriate discovery procedures as outlined herein.

(c) The investigative consumer reporting agency shall also identify the recipients of any investigative consumer report on the consumer that the investigative consumer reporting agency has furnished: (1) For employment or insurance purposes within the three-year period preceding the request. (2) For any other purpose within the three-year period preceding the request.

(d) The identification of a recipient under subdivision (c) shall include the name of the recipient or, if applicable, the trade name (written in full) under which the recipient conducts business and, upon request of the consumer, the address and telephone number of the recipient.

(e) The investigative consumer reporting agency shall also disclose the dates, original payees, and amounts of any checks or charges upon which is based any adverse characterization of the consumer, included in the file at the time of the disclosure.

SEC. 9. Section 1786.11 of the Civil Code is amended to read: 1786.11. Every investigative consumer reporting agency that provides an investigative consumer report to a person other than the consumer shall make a copy of that report available, upon request and proper identification, to the consumer for at least three years after the date that the report is provided to the other person.

SEC. 10. Section 1786.16 of the Civil Code is amended to read: 1786.16. (a) Any person described in subdivision (d) of Section 1786.12 shall not procure or cause to be prepared an investigative consumer report unless the following applicable conditions are met:

(1) If an investigative consumer report is sought in connection with the underwriting of insurance, it shall be clearly and accurately disclosed in writing at the time the application form, medical form, binder, or similar document is signed by the consumer that an investigative consumer report regarding the consumer's character, general reputation, personal characteristics, and mode of living may be made.

If no signed application form, medical form, binder, or similar document is involved in the underwriting transaction, the disclosure shall be made to the consumer in writing and mailed or otherwise delivered to the consumer not later than three days after the report was first requested. The disclosure shall include the name and address of any investigative consumer reporting agency conducting an investigation, plus the nature and scope of the investigation requested, and a summary of the provisions of Section 1786.22.

(2) If, at any time, an investigative consumer report is sought for employment purposes other than suspicion of wrongdoing by the subject of the investigation, the person procuring or causing the report to be made shall, not later than three days after the date on which the report was first requested, notify the consumer in writing that an investigative consumer report regarding the consumer'scharacter, general reputation, personal characteristics, and mode of living will be made. This notification shall include the name and address of the investigative consumer reporting agency conducting the investigation, the nature and scope of the investigation requested, and a summary of the provisions of Section 1786.22.

(3) If an investigative consumer report is sought in connection with the hiring of a dwelling unit, as defined in subdivision (c) of Section 1940, the person procuring or causing the request to be made shall, not later than three days after the date on which the report was first requested, notify the consumer in writing that an investigative consumer report will be made regarding the consumer's character, general reputation, personal characteristics, and mode of living. The notification shall also include the name and address of the investigative consumer reporting agency that will prepare the report and a summary of the provisions of Section 1786.22.

(4) The person procuring or causing the request to be made shall certify to the investigative consumer reporting agency that the person has made the applicable disclosures to the consumer required by this subdivision and that the person will comply with subdivision (b).

(5) The person procuring the report or causing it to be prepared agrees to provide a copy of the report to the subject of the investigation, as provided in subdivision (b).

(b) Any person described in subdivision (d) of Section 1786.12 who requests an investigative consumer report regarding that consumer shall provide the consumer with a copy of the report and information on who issued the report and how to contact them, either at the time of the meeting or interview between the consumer and the person who requests an investigative consumer report regarding that consumer or within seven days of the date such person receives the report, whichever is earlier.

(c) The provisions of subdivision (a) shall not apply to an investigative consumer report procured or caused to be prepared by an employer if the purpose of the employer is to determine whether to retain an employee when there is a good faith belief that the employee is engaged in any criminal activity likely to result in a loss to the employer.

(d) Those persons described in subdivision (d) of Section 1786.12 of this title shall constitute the sole and exclusive class of persons who may cause an investigative consumer report to be prepared. SEC. 11. Section 1786.18 of the Civil Code is amended to read: 1786.18. (a) Except as authorized under subdivision (b), no investigative consumer reporting agency shall make or furnish any investigative consumer report containing any of the following items of information:

(1) Bankruptcies that, from the date of adjudication, antedate the report by more than 10 years.

(2) Suits that, from the date of filing, and satisfied judgments that, from the date of entry, antedate the report by more than seven years.

(3) Unsatisfied judgments that, from the date of entry, antedate the report by more than seven years.

(4) Unlawful detainer actions where the defendant was the prevailing party or where the action is resolved by settlement agreement.

(5) Paid tax liens that, from the date of payment, antedate the report by more than seven years.

(6) Accounts placed for collection or charged to profit and loss that antedate the report by more than seven years.

(7) Records of arrest, indictment, information, misdemeanor complaint, or conviction of a crime that, from the date of disposition, release, or parole, antedate the report by more than seven years. These items of information shall no longer be reported if at any time it is learned that, in the case of a conviction, a full pardon has been granted or, in the case of an arrest, indictment, information, or misdemeanor complaint, a conviction did not result; except that records of arrest, indictment, information, or misdemeanor complaints may be reported pending pronouncement of
judgment on the particular subject matter of those records.

(8) Any other adverse information that antedates the report by more than seven years. (b) The provisions of subdivision (a) are not applicable in the case of any investigative consumer report to be used in the
underwriting of life insurance involving, or that may reasonably be expected to involve, an amount of two hundred fifty thousand dollars ($250,000) or more. (c) Except as otherwise provided in Section 1786.28, an investigative consumer reporting agency shall not furnish an investigative consumer report that includes information that is a
matter of public record and that relates to an arrest, indictment, conviction, civil judicial action, tax lien, or outstanding judgment, unless the agency has verified the accuracy of the information during the 30-day period ending on the date on which the report is furnished. (d) An investigative consumer reporting agency shall not prepare or furnish an investigative consumer report on a consumer that contains information that is adverse to the interest of the consumer and that is obtained through a personal interview with a neighbor, friend, or associate of the consumer or with another person with whom the consumer is acquainted or who has knowledge of the item of information, unless either (1) the investigative consumer reporting agency has followed reasonable procedures to obtain confirmation of the information, from an additional source that has independent and direct knowledge of the information, or (2) the person interviewed is the best possible source of the information.

SEC. 12. Section 1786.20 of the Civil Code is amended to read: 1786.20. (a) Every investigative consumer reporting agency shall maintain reasonable procedures designed to avoid violations of Section 1786.18 and to limit furnishing of investigative consumer reports for the purposes listed under Section 1786.12. These procedures shall require that prospective users of the information identify themselves, certify the purposes for which the information is sought and that the information will be used for no other purposes, and make the certifications described in paragraph (4) of subdivision (a) of Section 1786.16. From the effective date of this title, the investigative consumer reporting agency shall keep a record of the purposes for which information is sought, as stated by the user. Every investigative consumer reporting agency shall make a reasonable effort to verify the identity of a new prospective user and the uses certified by the prospective user prior to furnishing the user any investigative consumer reports. No investigative consumer reporting agency may furnish any investigative consumer reports to any person unless it has a written agreement that the investigative consumer reports will be used by that person only for purposes listed in Section 1786.12.

(b) Whenever an investigative consumer reporting agency prepares an investigative consumer report, it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates. An investigative consumer reporting agency shall retain the investigative consumer report for a period of three years.

(c) An investigative consumer reporting agency shall not make an inquiry for the purpose of preparing an investigative consumer report on a consumer for employment purposes if the making of the inquiry by an employer or prospective employer of the consumer would violate any applicable federal or state equal employment opportunity law or regulation.

(d) Any investigative consumer reporting agency that violates this section shall be liable to the consumer affected in an amount not less than twenty-five thousand dollars ($25,000). SEC. 13. Section 1786.24 of the Civil Code is amended to read: 1786.24. (a) If the completeness or accuracy of any item of information contained in his or her file is disputed by a consumer, and the dispute is conveyed directly to the investigative consumer reporting agency by the consumer, the investigative consumer reporting agency shall, without charge, reinvestigate and record the current status of the disputed information or delete the item from the file in accordance with subdivision (c), before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute from the consumer.

(b) The agency shall notify any person who provided information in dispute at the address and in the manner specified by that person. The notice shall include all relevant information regarding the dispute that the investigative consumer reporting agency has received from the consumer. The agency shall also promptly provide to the person who provided the information in dispute all relevant information regarding the dispute that is received by the agency from the consumer during the reinvestigation.

(c) In conducting a reinvestigation, the investigative consumer reporting agency shall review and consider all relevant information submitted by the consumer with respect to the disputed item of
information.

(d) Notwithstanding subdivision (a), an investigative consumer reporting agency may terminate a reinvestigation of information disputed by a consumer if the investigative consumer reporting agency reasonably determines that the dispute is frivolous or irrelevant, including by reason of a failure by a consumer to provide sufficient information to investigate the disputed information. Upon making a determination that a dispute is frivolous or irrelevant, the
investigative consumer reporting agency shall notify the consumer, by mail or, if authorized by the consumer for that purpose, by any other means available to the agency. In this notification, the investigative consumer reporting agency shall state the specific reasons why it has determined that the consumer's dispute is frivolous or irrelevant and provide a description of any information required to investigate the disputed information, that may consist of
a standardized form describing the general nature of the required information.

(e) If a reinvestigation is made and, after reinvestigation, the disputed item of information is found to be inaccurate, incomplete, or cannot be verified by the evidence submitted, the investigative consumer reporting agency shall promptly delete that information from the consumer's file or modify the information, as appropriate, based on the results of the reinvestigation, and shall notify the consumer that the information has been deleted or modified. The consumer reporting agency shall also notify any and all sources from which the disputed information was obtained and inform them in writing of the reasons and results of the reinvestigation, and send a copy of this
notification to the consumer.

(f) No information may be reinserted in a consumer's file after having been deleted pursuant to this section unless the person who furnished the information verifies that the information is complete and accurate. If any information deleted from a consumer's file is reinserted in the file, the investigative consumer reporting agency shall promptly notify the consumer of the reinsertion in writing or, if authorized by the consumer for that purpose, by any other means available to the agency. As part of, or in addition to, this notice, the investigative consumer reporting agency shall provide to the consumer in writing (1) a statement that the disputed information has been reinserted, (2) the name, address, and telephone number of any furnisher of information contacted or that contacted the investigative consumer reporting agency in connection with the reinsertion, and the telephone number of the furnisher, if reasonably available, and (3) a notice that the consumer has the right to a reinvestigation of the information reinserted by the investigative consumer reporting agency and to add a statement to his or her file disputing the accuracy or completeness of the information.

(g) An investigative consumer reporting agency shall provide notice to the consumer of the results of any reinvestigation under this section by mail or, if authorized by the consumer for that purpose, by other means available to the agency. The notice shall include (1) a statement that the reinvestigation is completed, (2) an
investigative consumer report that is based on the consumer's file as that file is revised as a result of the reinvestigation, (3) a description or indication of any changes made in the investigative consumer report as a result of those revisions to the consumer's file, (4) a notice that, if requested by the consumer, a description of the procedure used to determine the accuracy and completeness of the information shall be provided to the consumer by the investigative consumer reporting agency, including the name, business address, and telephone number of any furnisher of information contacted in connection with that information, (5) a notice that the consumer has the right to add a statement to the consumer's file disputing the accuracy or completeness of the information, and (6) a notice that the consumer has the right to request that the investigative consumer reporting agency furnish notifications under subdivision (k).

(h) The presence of information in the consumer's file that contradicts the contention of the consumer shall not, in and of itself, constitute reasonable grounds for believing the dispute is
frivolous or irrelevant.

(i) If the investigative consumer reporting agency determines that the dispute is frivolous or irrelevant, or if the reinvestigation does not resolve the dispute, or if the information is reinserted into the consumer's file pursuant to subdivision (f), the consumer may file a brief statement setting forth the nature of the dispute. The investigative consumer reporting agency may limit these statements to not more than 500 words if it provides the consumer
with assistance in writing a clear summary of the dispute.

(j) Whenever a statement of dispute is filed, the investigative consumer reporting agency shall, in any subsequent investigative consumer report containing the information in question, clearly note that the information is disputed by the consumer and shall include in the report either the consumer's statement or a clear and accurate
summary thereof.

(k) Following the deletion of information from a consumer's file pursuant to this section, or following the filing of a dispute pursuant to subdivision (i), the investigative consumer reporting agency shall, at the request of the consumer, furnish notification that the item of information has been deleted or that the item of information is disputed. In the case of disputed information, the notification shall include the statement or summary of the dispute filed pursuant to subdivision (i). This notification shall be furnished to any person who has, within two years prior to the deletion or the filing of the dispute, received an investigative consumer report concerning the consumer for employment purposes, or who has, within one year of the deletion or the filing of the dispute, received an investigative consumer report concerning the consumer for any other purpose, if these investigative consumer
reports contained the deleted or disputed information, unless the consumer specifically requests in writing, that this notification not be given to all persons or to any specified persons. The investigative consumer reporting agency shall clearly and conspicuously disclose to the consumer his or her rights to make a request that this notification not be made.

(l) An investigative consumer reporting agency shall maintain reasonable procedures designed to prevent the reappearance in a consumer's file and in investigative consumer reports information that has been deleted pursuant to this section and not reinserted pursuant to subdivision (f). (m) If the consumer's dispute is resolved by deletion of the disputed information within three business days, beginning with the day the investigative consumer reporting agency receives notice of the dispute in accordance with subdivision (a), the investigative consumer reporting agency shall be exempt from requirements for further action under subdivisions (g), (i), and (j), if the agency:

(1) provides prompt notice of the deletion to the consumer by telephone, (2) provides written confirmation of the deletion and a copy of an investigative consumer report of the consumer that is based on the consumer's file after the deletion, and (3) includes, in the telephone notice or in a written notice that accompanies the confirmation and report, a statement of the consumer's right to request under subdivision (k) that the agency not furnish
notifications under that subdivision.

(n) Any investigative consumer reporting agency that compiles and maintains files on consumers on a nationwide basis, as defined in the federal Fair Credit Reporting Act, as amended (15 U.S.C. Sec. 1681 et seq.), shall implement an automated system through which furnishers of information to that agency may report the results of a reinvestigation that finds incomplete or inaccurate information in a consumer's file to other investigative consumer reporting agencies.

(o) All actions to be taken by an investigative consumer reporting agency under this section are governed by the applicable time periods specified in Section 611 of the federal Fair Credit Reporting Act, as amended (15 U.S.C. Sec. 1681i).

SEC. 14. Section 1786.26 of the Civil Code is amended to read: 1786.26. (a) Except as otherwise provided in subdivision (c), an investigative consumer reporting agency may charge a consumer a fee not exceeding eight dollars ($8) for making disclosures to the consumer pursuant to Sections 1786.10, 1786.11, and 1786.22. Any
charges shall be indicated to the consumer prior to disclosure.

(b) An investigative consumer reporting agency shall not impose any charge for providing notice to a consumer required under Section 1786.24, furnishing an investigative consumer report pursuant to Section 1786.24, or notifying a person pursuant to subdivision (k) of Section 1786.24 of the deletion of information that is found to be
inaccurate or that cannot be verified.

(c) Upon the request of the consumer, an investigative consumer reporting agency shall make all disclosures pursuant to Section 1786.10 and 1786.22 once during any 12-month period without charge to that consumer if the consumer certifies in writing that he or she (1) is unemployed and intends to apply for employment in the 60-day
period beginning on the date the certification is made, (2) is a recipient of public welfare assistance, or (3) has reason to believe that the file on the consumer at the investigative consumer reporting agency contains inaccurate information due to fraud.

(d) An investigative consumer reporting agency shall not impose any charge on a consumer for providing any notification or making any disclosure required by this title, except as authorized by this section.

SEC. 15. Section 1786.28 of the Civil Code is amended to read: 1786.28. (a) Each investigative consumer reporting agency that collects, assembles, evaluates, compiles, reports, transmits, transfers, or communicates items of information concerning consumers which are matters of public record shall specify in any report
containing public record information the source from which this information was obtained, including the particular court, if applicable, and the date that this information was initially reported or publicized.

(b) A consumer reporting agency which furnishes a consumer report for employment purposes and which for that purpose compiles, collects, assembles, evaluates, reports, transmits, transfers, or communicates items of information on consumers which are matters of public record and are likely to have an adverse effect upon a consumer's ability to obtain employment shall in addition maintain strict procedures designed to insure that whenever public record information which is likely to have an adverse effect on a consumer's ability to obtain employment is reported it is complete and up to date. For purposes of this paragraph, items of public record relating to arrests, indictments, convictions, suits, tax liens, and outstanding judgments shall be considered up to date if the current public record status of the item at the time of the report is reported.

SEC. 16. Section 1786.29 is added to the Civil Code, to read: 1786.29. An investigative consumer-reporting agency shall provide the following notices: (a) As a cover sheet to any report, a notice in at least 16 point type that sets forth the following disclosures or warnings:

(1) The report does not guarantee the accuracy or truthfulness of
the information as to the subject of the investigation, but only that it is accurately copied from public records. Evidence of identity theft may or may not be identified from this report.

(2) The recipient of this report shall give a copy of this report to the subject of the report. (3) Failure to provide a copy of the report as required by law may
expose you to liability as specified in Section 1786.50. (b) An investigative consumer reporting agency shall provide a consumer seeking to obtain a copy of a report or making a request to review a file, a written notice in simple plain English and Spanish setting forth the terms and conditions of his or her right to receive all disclosures as provided in Section 1786.26. SEC. 17. Article 3 (commencing with Section 1786.40) of Title 1.6A of Part 4 of Division 3 of the Civil Code is repealed. SEC. 18. Section 1786.50 of the Civil Code is amended to read: 1786.50. (a) In addition to the penalty specified in Section 1786.20, any investigative consumer reporting agency or user of information that fails to comply with any requirement under this title with respect to an investigative consumer report is liable to the consumer who is the subject of the report in an amount equal to the sum of all the following:

(1) Any actual damages sustained by the consumer as a result of the failure or, except in the case of class actions, ten thousand dollars ($10,000), whichever sum is greater.

(2) In the case of any successful action to enforce any liability under this chapter, the costs of the action together with reasonable attorney's fees as determined by the court. (b) If the court determines that the violation was grossly negligent or willful, the court may, in addition, assess, and the consumer may recover, punitive damages. (c) Notwithstanding subdivision (a), an investigative consumer reporting agency or user of information that fails to comply with any requirement under this title with respect to an investigative consumer report shall not be liable to a consumer who is the subject of the report where the failure to comply results in a more favorable investigative consumer report than if there had not been a failure to comply.

SEC. 19. Section 1786.52 of the Civil Code is amended to read: 1786.52. Nothing in this chapter shall in any way affect the right of any consumer to maintain an action against an investigative consumer reporting agency, a user of an investigative consumer report, or an informant for invasion of privacy or defamation. An action to enforce any liability created under this title may be brought in any appropriate court of competent jurisdiction within
two years from the date of discovery.

(a) Any investigative consumer reporting agency or user of information against whom an action brought pursuant to Section 1681n or 1681o of Title 15 of the United States Code is pending shall not be subject to suit for the same act or omission under Section 1786.50. (b) The entry of a final judgment against the investigative consumer reporting agency or user of information in an action brought pursuant to the provisions of Section 1681n or 1681o of Title 15 of the United States Code shall be a bar to the maintenance of any action based on the same act or omission which might be brought under this title.

SEC. 20. Section 1786.53 is added to the Civil Code, to read:
1786.53. Any person who collects, assembles, evaluates, compiles, reports, transmits, transfers, or communicates information on a consumer's character, general reputation, personal characteristics, or mode of living for the purposes specified in subdivision (a) of Section 1786, in lieu of using the services of an investigative
consumer reporting agency, shall provide that information to the consumer at the time of the meeting or interview with the consumer, or within seven days of the date the person obtains the information
regarding the consumer, whichever is earlier. SEC. 21. Title 1.81.3 (commencing with Section 1798.92) is added
to Part 4 of Division 3 of the Civil Code, to read:

TITLE 1.81.3. IDENTITY THEFT

1798.92. For the purposes of this title: (a) "Claimant" means a person who has or purports to have a claim
for money or an interest in property in connection with a transaction procured through identity theft.

(b) "Identity theft" means the unauthorized use of another person' s personal identifying information to obtain credit, goods, services, money, or property.

(c) "Personal identifying information" means a person's name, address, telephone number, driver's license number, social security number, place of employment, employee identification number, mother's maiden name, demand deposit account number, savings account number, or credit card number.

(d) "Victim of identity theft" means a person who had his or her personal identifying information used without authorization by another to obtain credit, goods, services, money, or property, and did not use or possess the credit, goods, services, money, or property obtained by the identity theft, and filed a police report in this regard pursuant to Section 530.5 of the Penal Code.

1798.93.(a) A person may bring an action against a claimant to establish that the person is a victim of identity theft in connection with the claimant's claim against that person. If the claimant has brought an action to recover on its claim against the person, the person may file a cross-complaint to establish that the person is a victim of identity theft in connection with the claimant's claim.

(b) A person shall establish that he or she is a victim of identity theft by a preponderance of the evidence.

(c) A person who proves that he or she is a victim of identity theft, as defined in Section 530.5 of the Penal Code, as to a particular claim, shall be entitled to a judgment providing all of the following, as appropriate:

(1) A declaration that he or she is not obligated to the claimant on that claim.

(2) A declaration that any security interest or other interest the claimant had purportedly obtained in the victim's property in connection with that claim is void and unenforceable.

(3) An injunction restraining the claimant from collecting or attempting to collect from the victim on that claim, from enforcing or attempting to enforce any security interest or other interest in the victim's property in connection with that claim, or from enforcing or executing on any judgment against the victim on that claim.

(4) If the victim has filed a cross-complaint against the claimant, the dismissal of any cause of action in the complaint filed by the claimant based on a claim which arose as a result of the identity theft.

(5) Actual damages, attorney's fees, and costs, and any equitable relief that the court deems appropriate. In order to recover actual damages or attorney's fees in an action or cross-complaint filed by a person alleging that he or she is a victim of identity theft, the person shall show that he or she provided written notice to the claimant that a situation of identity theft might exist, including, upon written request of the claimant, a valid copy of the police
report or the Department of Motor Vehicles investigative report promptly filed pursuant to Section 530.5 of the Penal Code at least 30 days prior to his or her filing of the action, or within his or her cross-complaint pursuant to this section. (6) A civil penalty, in addition to any other damages, of up to thirty thousand dollars ($30,000) if the victim establishes by clear and convincing evidence all of the following: (A) That at least 30 days prior to filing an action or within the cross-complaint pursuant to this section, he or she provided written notice to the claimant at the address designated by the claimant for complaints related to credit reporting issues that a situation of
identity theft might exist and explaining the basis for that belief.

(B) That the claimant failed to diligently investigate the victim's notification of a possible identity theft.

(C) That the claimant continued to pursue its claim against the victim after the claimant was presented with facts that were later held to entitle the victim to a judgment pursuant to this section. 1798.94. An action or cross-complaint brought under this title that joins other claimants as defendants in the same action or cross-complaint shall be deemed to comply with Section 379 of the Code of Civil Procedure.

1798.95. A court shall have continuing jurisdiction over an action or cross-complaint filed pursuant to this title in order to provide for the joinder of related causes of action based on the theft of the same person's identity and the joinder of further defendants based upon the theft of the same person's identity, regardless of whether a final judgment has been entered as to any defendant. The court's continuing jurisdiction shall terminate 10 years after filing of the original action unless the court, prior to that date, finds good cause to extend jurisdiction over the matter.

1798.96. Any action brought pursuant to this title or any joinder of a defendant pursuant to Section 1798.82 may be brought within four years of the date the person who alleges that he or she is a victim of identity theft knew or, in the exercise of reasonable diligence, should have known of the existence of facts which would
give rise to the bringing of the action or joinder of the defendant.

1798.97. (a) This title does not apply to a transaction subject to Section 1747.10. (b) Nothing is this title shall be construed to affect a claimant' s rights and remedies against a person who perpetrates identity theft or against any person who used or possessed the credit, goods, services, or property obtained by identity theft.
(c) This title is cumulative to the rights and remedies provided under other laws. SEC. 22. Section 1.5 of this bill incorporates amendments to Section 1785.10 of the Civil Code proposed by both this bill and AB 488. It shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2002, (2) each bill
amends Section 1785.10 of the Civil Code, and (3) this bill is enacted after AB 488, in which case Section 1 of this bill shall not become operative.