Bill would limit credit data access

Consumers would be able
to freeze credit histories for $5 charge

By JON CHESTO
The Patriot Ledger

BOSTON

Legislation that would allow consumers to freeze access to their credit histories for $5 is moving forward on Beacon Hill.

The House’s previous version of an anti-identity theft bill included a proposed “security freeze,” but would have imposed $10 fees to freeze credit access and to unlock it at a later date. The House passed an ID theft bill yesterday that would reduce the proposed fee to $5 for each of the three main credit reporting agencies. Blocking access to credit reports makes it tough for a would-be thief to open up credit in a victim’s name.

Sen. Michael Morrissey, the co-chairman of the consumer protection committee, said last night that he expects Senate leaders will also back a reduction in the proposed fee from $10 to $5 in the Senate version of the bill, which was expected to be discussed at the State House today.

The House bill also contains a breach notification requirement that requires companies and government agencies to contact affected consumers if their personal data have been compromised to the point that the information could be used to commit identity theft.

Morrissey, a Democrat from Quincy, said the Senate version will also contain a notification requirement.

Morrissey said he expects the Senate bill would exempt financial firms from the notification requirement if they are already required to notify customers under federal law. However, he said it’s likely the Senate bill would require those financial firms to notify the state Attorney General of any breach – a requirement that’s included in the House bill.

Because the two bills have some differences, a compromise measure will probably need to be hashed out in a conference committee. However, Morrissey said he remains hopeful that an identity theft bill can be sent to Gov. Deval Patrick for his signature within the next several weeks.

“The bottom line is that this bill is a victory for consumers,” said Eric Bourassa, a consumer advocate with the Massachusetts Public Interest Research Group.

Bourassa’s organization has been lobbying for identity theft reforms – such as a security freeze and a breach notification bill – on Beacon Hill for several years with little success until now.

A breach at national data broker ChoicePoint that became public two years ago highlighted the importance of California’s breach notification law and sparked a flurry of similar bills in other states. Many of them also contained language allowing consumers to freeze access to their credit.

The Massachusetts Legislature didn’t move forward with its own identity theft bill in the last two-year session, partly because legislative leaders’ efforts were consumed by a complex health care bill.

The recent data breach at Framingham-based retailer TJX Cos. that may have exposed more than 45 million credit and debit card accounts – making it the largest identity theft on record – helped spur state officials to action.

“I think TJX gave the urgency to say, ‘We’re going to do this,’” Bourassa said.

For a special report on ID theft go to PatriotLedger.com and click on “Special Reports” at the top.

Jon Chesto may be reached at jchesto@ledger.com.