Banking and Finance Law Daily Wrap Up, PRIVACY—South Carolina expands security freeze protections, (Apr 9, 2014)

By Charles A. Menke, J.D.

Legislation that expands South Carolina’s current security freeze protections will require consumer reporting agencies (CRAs) to implement the placement of security freezes for specified protected consumers upon request. A protected consumer covered by the legislation (S.B. 148) includes individuals who are under the age of 16, incapacitated, or for whom a guardian or conservator has been appointed.

Placing security freeze. A CRA must place a security freeze on the credit report of a protected consumer at the request of a parent or guardian who provides sufficient proof of identification and authority to act. The CRA has 30 days to place the security freeze, which remains in place until the protected consumer or representative requests its removal.

Creating a record. If the CRA does not have a file pertaining to a protected consumer for whom a security freeze request has been made, then the CRA must create a “record” for the consumer. A “record” is a compilation of information that identifies the protected consumer; is created solely for the purpose of this law; and may not be used to consider the protected consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.

Removing security freeze. A CRA must remove a protected consumer security freeze within 15 days after receiving a request for removal. In addition, a CRA may remove a freeze or delete a record if it was placed or created based on material misrepresentations of fact.

Fees. A CRA is prohibited from charging any fee for placing a protected consumer security freeze. In addition, a CRA is prohibited from charging a fee to create a consumer credit file when required to place a security freeze.

Effective date. Senate Bill 148 takes effect Jan. 1, 2015.

LegislativeActivity: IdentityTheft Privacy SouthCarolinaNews