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S. 76
STATUS INFORMATION
General Bill
Sponsors: Senators Knotts and Elliott
Document Path: l:\council\bills\ms\7016mm05.doc
Companion/Similar bill(s): 3508
Introduced in the Senate on January 11, 2005
Currently residing in the Senate Committee on Banking and Insurance
Summary: Consumer Credit Report Rights Act; Fair Credit Reporting Act
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number ------------------------------------------------------------------------------- 12/8/2004 Senate Prefiled 12/8/2004 Senate Referred to Committee on Banking and Insurance 1/11/2005 Senate Introduced and read first time SJ-116 1/11/2005 Senate Referred to Committee on Banking and Insurance SJ-116
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VERSIONS OF THIS BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 46 TO TITLE 15 SO AS TO ENACT THE SOUTH CAROLINA FAIR CREDIT-REPORTING ACT, TO PROVIDE THAT UNFAIR METHODS OF REPORTING CREDIT HISTORY AND UNFAIR OR DECEPTIVE ACTS IN THE CONDUCT OF CREDIT REPORTING ARE UNLAWFUL, TO PROVIDE THAT THE FEDERAL FAIR CREDIT REPORTING ACT AS INTERPRETED BY THE FEDERAL TRADE COMMISSION AND FEDERAL COURTS MUST FURNISH GUIDANCE IN CONSTRUING THIS CHAPTER, TO PROVIDE PENALTIES FOR WILFUL AND NEGLIGENT NONCOMPLIANCE WITH THE TERMS OF THIS CHAPTER, TO PROVIDE FOR THE JURISDICTION OF THE STATE COURTS TO HEAR ACTIONS BROUGHT PURSUANT TO THIS CHAPTER, AND TO PROVIDE, WITH EXCEPTIONS, A TWO-YEAR STATUTE OF LIMITATIONS TO SEEK RELIEF PURSUANT TO THIS CHAPTER; AND BY ADDING PART 4 TO CHAPTER 5, TITLE 37 SO AS TO ENACT THE SOUTH CAROLINA CONSUMER CREDIT REPORT RIGHTS ACT AND TO PROVIDE FOR DEFINITIONS, THE RELEASE OF A FREE WRITTEN OR ELECTRONIC DISCLOSURE COPY OF A CONSUMER'S CREDIT REPORT, WRITTEN NOTICE TO A CONSUMER OF HIS RIGHT TO REQUEST A REPORT, A TOLL-FREE TELEPHONE NUMBER FOR A DISCLOSURE REQUEST, AND CIVIL PENALTIES FOR VIOLATIONS AND FOR FAILURE TO CORRECT INACCURACIES IN THE REPORT.
Whereas, the General Assembly finds that:
(1) the banking system depends upon fair and accurate credit reporting. Inaccurate credit reports directly impair the efficiency of the banking system and unfair credit-reporting methods undermine the public confidence essential to the continued functioning of the banking system;
(2) an elaborate mechanism has been developed for investigating and evaluating the creditworthiness, credit standing, credit capacity, character, and general reputation of consumers;
(3) consumer credit-reporting agencies have assumed a vital role in assembling and evaluating consumer credit and other information on consumers;
(4) the need exists to ensure that consumer credit-reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's privacy;
(5) the need exists also to ensure both access of the consumer to his credit report and the ability to enforce corrections to it; and
Whereas, the purpose of this act is to require consumer credit-reporting agencies to adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer and with due regard to the confidentiality, accuracy, relevancy, and proper utilization of this information in accordance with the requirements of this act and the federal Fair Credit Reporting Act, 15 U.S. Code 1681; and
Whereas, the further purpose of this act is to afford the citizens of South Carolina access to their credit reports and the opportunity to enforce liability established pursuant to this act in the courts of this State.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 15 of the 1976 Code is amended by adding:
Section 15-46-10. This chapter may be cited as the 'South Carolina Fair Credit Reporting Act'.
Section 15-46-20. (A) Unfair methods of reporting credit history and unfair or deceptive acts or practices in the conduct of credit reporting are unlawful.
(B) It is the intent of the General Assembly that in construing subsection (A) the courts be guided by the interpretations given by the Federal Trade Commission and the federal courts to the federal Fair Credit Reporting Act, 15 U.S. Code 1681, as amended.
Section 15-46-30. For purposes of this chapter, a person acting as a consumer credit-reporting agency shall furnish a consumer credit report only pursuant to the circumstances permitted in the federal Fair Reporting Act, 15 U.S. Code 1681. Also, for purposes of this chapter, a 'person' means a natural person, firm, corporation, partnership, or other business entity.
Section 15-46-40. A person who wilfully fails to comply with a requirement of this chapter is liable to the consumer for:
(1) actual damages sustained by the consumer as a result of the wilful failure to comply or damages of not less than one hundred dollars and not more than one thousand dollars;
(2) punitive damages as allowed by law; and
(3) reasonable attorney's fees and costs as determined by the court in a successful action to enforce liability pursuant to this section.
Section 15-46-50. A person who is negligent in failing to comply with a requirement imposed by this chapter is liable to the consumer for:
(1) actual damages sustained by the consumer as a result of the failure; and
(2) reasonable attorney's fees and costs as determined by the court in a successful action to enforce liability pursuant to this section.
Section 15-46-60. A person who obtains a consumer credit report from a consumer credit-reporting agency under false pretenses or knowingly without a permissible purpose is liable to the consumer credit-reporting agency for:
(1) actual damages sustained by the consumer credit-reporting agency or one thousand dollars, whichever is greater;
(2) punitive damages as allowed by law; and
(3) reasonable attorney's and costs as determined by the court in a successful action to enforce liability pursuant to this section.
Section 15-46-70. Upon a finding by the court that an unsuccessful pleading, motion, or other paper was filed in connection with an action pursuant to this chapter in bad faith or for the purposes of harassment, the court shall award to the prevailing party attorney's fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper.
Section 15-46-80. An action to enforce liability established pursuant to this chapter may be brought in a South Carolina state court of record in the county where the plaintiff resides. The action may be brought within two years from the date on which the liability arises, except that if a defendant materially and wilfully has misrepresented information which is required to be disclosed to an individual pursuant to this chapter and the misrepresented information is material to the establishment of the defendant's liability to that individual pursuant to this chapter, the action may be brought within two years after the discovery of the misrepresentation by the individual.
Section 15-46-90. The remedies established pursuant to this chapter are cumulative and in addition to all other remedies provided by law."
SECTION 2. Chapter 5, Title 37 of the 1976 Code is amended by adding:
Section 37-5-401. This part may be cited as the 'South Carolina Consumer Credit Report Rights Act'.
Section 37-5-402. As used in this part, unless the context otherwise requires:
(1) 'Adverse action' includes:
(a) the denial of, increase in charge for, or reduction in the amount of insurance for personal, family, or household purposes;
(b) the denial of employment or other decision for employment purposes that adversely affects a current or prospective employee; and
(c) an action or determination with respect to a consumer's application for credit pursuant to a credit arrangement that is adverse to the consumer's interests.
(2) 'Consumer' means a natural person residing in the State of South Carolina who undertakes a transaction for personal, family, or household purposes.
(3)(a) 'Consumer report' means any written, oral, electronic, or other communication or information by a consumer credit-reporting agency regarding a consumer's creditworthiness, credit standing, credit capacity, debts, character, general reputation, personal characteristics, or mode of living that is used or expected to be used or collected, in whole or in part, for employment purposes, for the purpose of establishing a consumer's eligibility for consumer credit or consumer insurance, or for another purpose authorized pursuant to the federal 'Fair Credit Reporting Act'.
(b) 'Consumer report' does not include:
( i) a report containing information as to a transaction between the consumer and the person making the report;
( ii) an authorization or approval by the issuer of a credit card or similar device, directly or indirectly, of a specific extension of credit; or
(iii) a report in which a person conveys an adverse decision in response to a request from a third party to make a specific extension of credit, directly or indirectly, to the consumer, if the third party advises the consumer of the name and address of the person to whom the request was made and the person makes the required disclosures to the consumer pursuant to the provisions of the federal 'Fair Credit Reporting Act'.
(4)(a) 'Consumer credit-reporting agency' means a person who, for monetary fees or dues or on a cooperative nonprofit basis, regularly engages in the practice of assembling or evaluating consumer credit information or other information about consumers for the purpose of furnishing consumer reports to third parties.
(b) 'Consumer credit-reporting agency' does not include a business entity that provides only check verification or check guarantee services.
(5) 'Creditworthiness' means an entry in a consumer's credit file that affects the ability of a consumer to obtain and retain credit, employment, business or professional licenses, investment opportunities, or insurance. Entries affecting creditworthiness include, but are not limited to, payment information, defaults, judgments, liens, bankruptcies, collections, records of arrest and indictments, and multiple credit inquiries.
(6) 'Employment purposes' means the use of a consumer report for the purpose of evaluating a consumer for employment, promotion, reassignment, or retention as an employee.
(7) 'File' means all information on a consumer that is recorded and retained by a consumer credit-reporting agency, regardless of how the information is stored.
(8) 'Person' means a natural person, firm, corporation, or partnership.
Section 37-5-403. (A) A consumer credit-reporting agency, upon the written or oral request of a consumer, shall provide the consumer with one disclosure copy of his file each year at no charge.
(B) Upon the written, electronic, or oral request of the consumer and proper identification, a consumer credit-reporting agency shall disclose in writing or by electronic mail and in a clear, accurate, and understandable manner, all information pertaining to the consumer in its files at the time of the request including, but not limited to:
(1) the names of all persons requesting credit information pertaining to the consumer during the previous twelve-month period and the date of each request;
(2) a set of instructions describing how information is disclosed in the file; and
(3) a toll-free number for use in resolving a dispute if the consumer submits a written dispute to the consumer credit-reporting agency.
(C)(1) A consumer credit-reporting agency shall notify a consumer by first-class mail that the consumer may have a copy of his consumer file at no charge, and of a toll-free telephone number to call to request the copy, if, within a twelve-month period:
(a) the consumer credit-reporting agency receives three credit inquiries pertaining to the consumer; or
(b) the consumer credit-reporting agency receives a report adding negative information to a consumer's file.
(2) A consumer credit-reporting agency shall send only one letter to a consumer in a twelve-month period even if more than one of the events described in item (1) of this subsection occurs in that period.
(3) A letter mailed to a consumer pursuant to this subsection may not contain identifying information particular to that consumer including, but not limited to, social security number, place of employment, date of birth, or mother's maiden name.
(4) A letter mailed to a consumer pursuant to this subsection may be a form letter, except that the letter must advise the consumer of the number and types of events, as described in item (1) of this subsection, relating to the consumer. The letter must include a notice or separate form the consumer may complete and return to the consumer credit-reporting agency to request a free copy of the consumer's credit report.
Section 37-5-404. (A) A consumer credit-reporting agency may not impose a charge for:
(1) a request for a copy of the consumer's file made within sixty days after adverse action is taken;
(2) notice to a person designated by the consumer, pursuant to the applicable provisions of the federal 'Fair Credit Reporting Act', of the deletion of inaccurate or unverifiable information;
(3) instructions for understanding the information presented on the consumer report and a toll-free telephone number for consumers to obtain additional assistance concerning the consumer report; or
(4) the first copy of a consumer disclosure provided to a consumer each calendar year pursuant to Section 37-5-403(A).
(B) If the consumer requests more than one disclosure copy of his file during a year, the consumer credit-reporting agency may charge the consumer not more than eight dollars for each additional disclosure copy.
Section 37-5-405. (A) A consumer credit-reporting agency that wilfully violates a provision of this part is liable for three times the amount of actual damages or one thousand dollars for each incident, whichever is greater, as well as reasonable attorney's fees and costs.
(B) A consumer credit-reporting agency that negligently violates this part is liable for the greater of actual damages or one thousand dollars for each incident, as well as reasonable attorney's fees and costs.
(C) In addition to the damages assessed pursuant to subsections (A) and (B), if the injury is to the consumer's creditworthiness, credit standing, credit capacity, character, general reputation, employment options, or eligibility for insurance, and results from inaccuracies in the consumer's file and the consumer's file is not corrected by the consumer credit-reporting agency within ten days after the entry of a judgment for damages, the assessed damages must be increased to one thousand dollars each day for each inaccurate entry that remains in the consumer's file until the inaccurate entry is corrected.
Section 37-5-406. The provisions of this part are cumulative, and an action taken pursuant to this part is not an election to take that action to the exclusion of other action authorized by law."
SECTION 3. The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.
SECTION 4. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this chapter and this part, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
SECTION 5. This act takes effect upon approval by the Governor.
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