New Jersey Passes ID Theft Law with Credit Freeze Availability for All
Good news for New Jersey consumers (via South Jersey Courier Post Online) and credit freeze advocates:
TRENTON — By January, New Jerseyans will gain more tools to protect themselves against identity thieves, and businesses will have to follow stricter rules to guard consumers’ personal data.
To combat a crime the FBI says is one of the fastest growing in the nation, acting Gov. Richard J. Codey signed the Identity Theft Prevention Act and two other laws at a public ceremony in his State House office Thursday.
“A good name is always worth protecting,” Codey said.
The law, which officials contend is the strongest in the country, allows identity theft victims to place on their credit reports a “security freeze,” which prevents the opening of new accounts unless a personal identity number is used to remove the freeze.
That provision takes effect in January.
Identity-theft victims will also be able to file police reports with local police even if another jurisdiction is responsible for investigating the complaint. This goes into effect immediately.
Come January, the use of Social Security numbers as identifiers will be limited.
The law also requires businesses to destroy records containing consumer personal information and notify consumers when personal data is breached.
The Philadelphia Inquirer (requires registration; link added by me) adds:
The San Diego-based Privacy Rights Clearinghouse considers New Jersey’s legislation one of the most progressive efforts to fight identity theft and assist victims, because it goes as far as federal law will allow.
The credit report freeze makes it more difficult for criminals to get additional lines of credit once they steal someone’s information. Consumers would initiate a freeze by writing directly to the three major credit reporting agencies or contacting them through a secure electronic process provided by the credit agencies.
Another aspect of the law bars the use of scanning and re-encoding devices, which identity thieves use to gain access to encoded information on ATM, credit and debit cards.
The law that the Governor signed on September 22 consists of what was passed by the NJ Assembly on June 15, plus a tiny amendment on June 16.
A quick look through the law indicates that placing a credit freeze will be free and that temporary freeze removals will be $5, and that any consumer can place a freeze on his or her own files (other states allow freezes only in cases of identity theft).
Except for the fee for freeze removal, this law is about the best one could hope for at the state level. The best feature of this law may not be in its text, but in the pressure it could place on Congress, where several bills are in the works, to pass a law at the federal level that is at least as strict as New Jersey’s. I think the case for uniform credit laws covering the entire nation is strong. The nationalization inherent in both the 1997 Fair Credit Reporting Act and 2003 Fair and Accurate Credit Transactions Act both streamlined many credit-granting and collection-related procedures thoughout the country, which has benefitted lenders, the credit bureaus, and consumers. It’s time to give everyone in the US at least the level of control over access to their credit files that the citizens of New Jersey will have on January 1. The one place where nationalization hasn’t taken hold, lender fees and rates, has been abused by lenders who have moved operations to states that allow usurious rates, and, combined with lapdog regulation at the US Comptroller of the Currency, has unfairly injured millions of consumer borrowers.
I would hope that legislation coming out of Congress would not permit the bureaus to charge a freeze removal fee (remember it’s YOUR data, they’re just storing it). I would also hope that Congress might give consumers a year or two to opt-in to unfrozen files, after which all consumers who did not state a preference would be put into a frozen position.
