A BILL TO BE ENTITLED
AN ACT amending the identity theft protection act.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 75‑61(14) reads as rewritten:
"§ 75‑61.  Definitions.
The following definitions apply in this Article:
…
(14)	"Security breach". – An incident of unauthorized access to or acquisition of unencrypted and unredacted records or data containing personal information where illegal use of the personal information has occurred or is reasonably likely to occur or that creates a material risk of harm to a consumer. Any incident of unauthorized access to or acquisition of encrypted records or data containing personal information along with the confidential process or key shall constitute a security breach. Good faith acquisition of personal information by an employee or agent of the business for a legitimate purpose is not a security breach, provided that the personal information is not used for a purpose other than a lawful purpose of the business and is not subject to further unauthorized disclosure. Any determination that illegal use has not occurred or is not reasonably likely to occur or that no material risk of harm is created shall be documented and maintained for at least three years.
…."
SECTION 2.  G.S. 75‑63 reads as rewritten:
"§ 75‑63.  Security freeze.
(a)	A consumer may place a security freeze on the consumer's credit report by making a request to a consumer reporting agency in accordance with this subsection. A security freeze shall prohibit, subject to exceptions in subsection (l) of this section, the consumer reporting agency from releasing the consumer's credit report or any information from it without the express authorization of the consumer. When a security freeze is in place, a consumer reporting agency may not release the consumer's credit report or information to a third party without prior express authorization from the consumer. This subsection does not prevent a consumer reporting agency from advising a third party that a security freeze is in effect with respect to the consumer's credit report, provided that the consumer reporting agency does not state or otherwise imply to the third party that the consumer's security freeze reflects a negative credit score, history, report, or rating. A consumer reporting agency shall place a security freeze on a consumer's credit report if the consumer requests a security freeze by any of the following methods:
(1)	First‑class mail.
(2)	Telephone call.
(3)	Secure Internet Web site or secure electronic mail connection.
(a1)	A nationwide consumer reporting agency, as defined in 15 U.S.C. § 1681a(p) of the federal Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq., that receives a request from a consumer residing in this State to place a security freeze on the consumer's file, shall provide the consumer with the option of having the freeze implemented by all consumer reporting agencies that assemble or evaluate information about consumers in this State.
Notwithstanding any provision of law to the contrary, consumer reporting agencies that assemble or evaluate information about consumers in this State shall create and maintain a shared Internet Web site and toll‑free number that a consumer can contact to request a security freeze and actions related to a security freeze. A request made via the toll‑free number or Internet Web site shall be considered made to all credit reporting agencies and shall trigger all applicable provisions of this section with respect to each consumer reporting agency. A consumer reporting agency that receives a request for a security freeze from a consumer shall communicate that request to the other consumer reporting agencies within three days of receipt of the request. Once a consumer reporting agency receives such a communication from another consumer reporting agency, all applicable provisions of this section shall be triggered with respect to that agency as if the agency received notice directly from the consumer.
(b)	A consumer reporting agency shall place a security freeze on a consumer's credit report no later than three business days after receiving a written request from the consumer by mail. A consumer reporting agency that receives such a request electronically or by telephone shall comply with the request within 24 hours of receiving the request.
(c)	The consumer reporting agency shall send a written confirmation of the security freeze to the consumer within three business days of placing the freeze and at the same time shall provide the consumer with a unique personal identification number or password, other than the consumer's social security number, to be used by the consumer when providing authorization for the release of the consumer's credit report for a specific period of time, or to a specific party, or for permanently lifting the freeze.
(d)	If the consumer wishes to allow the consumer's credit report to be accessed for a specific period of time or by a specific party while a freeze is in place, the consumer shall contact the consumer reporting agency by mail, phone, or electronically, request that the freeze be lifted or lifted with respect to a specific party, and provide all of the following:
(1)	Proper identification.
(2)	The unique personal identification number or password provided by the consumer reporting agency pursuant to subsection (c) of this section.
(3)	The proper information regarding the third party who is authorized to receive the consumer credit report or the time period for which the report shall be available to users of the credit report.
(e)	Repealed by Session Laws 2009‑355, s. 1, effective October 1, 2009.
(f)	A consumer reporting agency that receives a request by mail from a consumer to lift a freeze on a credit report pursuant to subsection (d) of this section shall comply with the request no later than three business days after receiving the request. A consumer reporting agency that receives such a request electronically or by telephone shall comply with the request within 15 minutes of receiving the request.
(g)	A consumer reporting agency shall remove, temporarily lift, or lift with respect to a specific third party a freeze placed on a consumer's credit report only in the following cases:
(1)	Upon the consumer's request, pursuant to subsections (d) or (j) of this section.
(2)	If the consumer's credit report was frozen due to a material misrepresentation of fact by the consumer. If a consumer reporting agency intends to remove a freeze upon a consumer's credit report pursuant to this subdivision, the consumer reporting agency shall notify the consumer in writing prior to removing the freeze on the consumer's credit report.
(g1)	A consumer reporting agency need not meet the time requirements provided in this section, only for such time as the occurrences prevent compliance, if any of the following occurrences apply:
(1)	The consumer fails to meet the requirements of subsection (d) or (j) of this section.
(2)	The consumer reporting agency's ability to remove, place, temporarily lift, or lift with respect to a specific party the security freeze is prevented by any of the following:
a.	An act of God, including fire, earthquakes, hurricanes, storms, or similar natural disaster or phenomena.
b.	Unauthorized or illegal acts by a third party, including terrorism, sabotage, riot, vandalism, labor strikes or disputes disrupting operations, or similar occurrences.
c.	Operational interruption, including electrical failure, unanticipated delay in equipment or replacement part delivery, computer hardware or software failures inhibiting response time, or similar disruption.
d.	Governmental action, including emergency orders or regulations, judicial or law enforcement action, or similar directives.
e.	Regularly scheduled maintenance, during other than normal business hours, of, or updates to, the consumer reporting agency's systems.
f.	Commercially reasonable maintenance of, or repair to, the consumer reporting agency's systems that is unexpected or unscheduled.
g.	Receipt of a request outside of normal business hours.
(h)	If a third party requests access to a consumer credit report on which a security freeze is in effect and this request is in connection with an application for credit or any other use and the consumer does not allow the consumer's credit report to be accessed for that specific period of time, the third party may treat the application as incomplete.
(i)	If a consumer requests a security freeze pursuant to this section, the consumer reporting agency shall disclose to the consumer the process of placing and temporarily lifting a security freeze and the process for allowing access to information from the consumer's credit report for a specific period of time or to a specific third party while the security freeze is in place.
(j)	A security freeze shall remain in place until the consumer requests that the security freeze be temporarily lifted for a specific period of time or to a specific third party or removed. A consumer reporting agency shall remove a security freeze within 15 minutes of receiving an electronic request for removal from the consumer or within three business days of receiving a written or telephonic request for removal from the consumer, who provides all of the following:
(1)	Proper identification.
(2)	The unique personal identification number or password provided by the consumer reporting agency pursuant to subsection (c) of this section.
(k)	A consumer reporting agency shall require proper identification of the person making a request to place or remove a security freeze.
(l)	The provisions of this section do not apply to the use of a consumer credit report by any of the following:
(1)	A person, or the person's subsidiary, affiliate, agent, subcontractor, or assignee with whom the consumer has, or prior to assignment had, an account, contract, or debtor‑creditor relationship for the purposes of reviewing the active account or collecting the financial obligation owing for the account, contract, or debt.
(2)	A subsidiary, affiliate, agent, assignee, or prospective assignee of a person to whom access has been granted under subsection (d) of this section for purposes of facilitating the extension of credit or other permissible use.
(3)	Any person acting pursuant to a court order, warrant, or subpoena.
(4)	A state or local agency, or its agents or assigns, which administers a program for establishing and enforcing child support obligations.
(5)	A state or local agency, or its agents or assigns, acting to investigate fraud, including Medicaid fraud, or acting to investigate or collect delinquent taxes or assessments, including interest and penalties, unpaid court orders, or to fulfill any of its other statutory responsibilities.
(6)	A federal, state, or local governmental entity, including law enforcement agency, court, or their agent or assigns.
(7)	A person for the purposes of prescreening as defined by the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq.
(8)	Any person for the sole purpose of providing for a credit file monitoring subscription service to which the consumer has subscribed.
(9)	A consumer reporting agency for the purpose of providing a consumer with a copy of the consumer's credit report upon the consumer's request.
(10)	Any depository financial institution for checking, savings, and investment accounts.
(11)	Any property and casualty insurance company for use in setting or adjusting a rate, adjusting a claim, or underwriting for property and casualty insurance purposes.
(12)	A person for the purpose of furnishing or using credit reports for employment purposes pursuant to 15 U.S.C. § 1681b(b) or tenant screening pursuant to 15 U.S.C. § 1681b(a)(3)(F).
(13)	A person for the purpose of criminal background record information.
(m)	If a security freeze is in place, a consumer reporting agency shall not change any of the following official information in a credit report without sending a written confirmation of the change to the consumer within 30 days of the change being posted to the consumer's file: name, date of birth, social security number, and address. Written confirmation is not required for technical modifications of a consumer's official information, including name and street abbreviations, complete spellings, or transposition of numbers or letters. In the case of an address change, the written confirmation shall be sent to both the new address and the former address.
(n)	The following persons are not required to place in a credit report a security freeze pursuant to this section provided, however, that any person that is not required to place a security freeze on a credit report under the provisions of subdivision (3) of this subsection shall be subject to any security freeze placed on a credit report by another consumer reporting agency from which it obtains information:
(1)	A check services or fraud prevention services company, which reports on incidents of fraud or issues authorizations for the purpose of approving or processing negotiable instruments, electronic fund transfers, or similar methods of payment.
(2)	A deposit account information service company, which issues reports regarding account closures due to fraud, substantial overdrafts, ATM abuse, or other similar negative information regarding a consumer to inquiring banks or other financial institutions for use only in reviewing a consumer request for a deposit account at the inquiring bank or financial institution.
(3)	A consumer reporting agency that does all of the following:
a.	Acts only to resell credit information by assembling and merging information contained in a database of one or more credit reporting agencies.
b.	Does not maintain a permanent database of credit information from which new credit reports are produced.
(o)	Unless expressly authorized in this Article, a consumer reporting agency shall not charge a fee to put a security freeze in place, remove a freeze, or lift a  freeze. A consumer reporting agency shall not charge an additional fee to a consumer who requests to temporarily lift for a specific period of time or to a specific third party, reinstate, or remove a security freeze. A consumer reporting agency shall not charge a consumer for a onetime reissue of a replacement personal identification number. A consumer reporting agency may charge a fee not to exceed three dollars ($3.00) to provide any subsequent replacement personal identification number.
(o1)	Repealed by Session Laws 2015‑193, s. 2, effective January 1, 2016.
(p)	At any time that a consumer is required to receive a summary of rights required under section 609 of the federal Fair Credit Reporting Act, the following notice shall be included:
"North Carolina Consumers Have the Right to Obtain a Security Freeze.
You have a right to place a "security freeze" on your credit report pursuant to North Carolina law. The security freeze will prohibit a consumer reporting agency from releasing any information in your credit report without your express authorization. A security freeze can be requested in writing by first‑class mail, by telephone, or electronically. You also may request a freeze by visiting the following Web site: [URL] or calling the following telephone number: [NUMBER].
The security freeze is designed to prevent credit, loans, and services from being approved in your name without your consent. However, you should be aware that using a security freeze to take control over who gains access to the personal and financial information in your credit report may delay, interfere with, or prohibit the timely approval of any subsequent request or application you make regarding new loans, credit, mortgage, insurance, rental housing, employment, investment, license, cellular phone, utilities, digital signature, Internet credit card transactions, or other services, including an extension of credit at point of sale.
The freeze will be placed within three business days if you request it by mail, or within 24 hours if you request it by telephone or electronically. When you place a security freeze on your credit report, within three business days, you will be sent a personal identification number or a password to use when you want to remove the security freeze, temporarily lift it, or lift it with respect to a particular third party.
A freeze does not apply when you have an existing account relationship and a copy of your report is requested by your existing creditor or its agents or affiliates for certain types of account review, collection, fraud control, or similar activities.
You should plan ahead and lift a freeze if you are actively seeking credit or services as a security freeze may slow your applications, as mentioned above.
You can remove a freeze, temporarily lift a freeze, or lift a freeze with respect to a particular third party by contacting the consumer reporting agency and providing all of the following:
(1)	Your personal identification number or password,
(2)	Proper identification to verify your identity, and
(3)	Proper information regarding the period of time you want your report available to users of the credit report, or the third party with respect to which you want to lift the freeze.
A consumer reporting agency that receives a request from you to temporarily lift a freeze or to lift a freeze with respect to a particular third party on a credit report shall comply with the request no later than three business days after receiving the request by mail and no later than 15 minutes after receiving a request by telephone or electronically.

	
You have a right to bring a civil action against someone who violates your rights under the credit reporting laws. The action can be brought against a consumer reporting agency or a user of your credit report."
(q)	A violation of this section is a violation of G.S. 75‑1.1."
SECTION 3.  G.S. 75‑63.1(d) reads as rewritten:
"(d)	Fees. – A consumer reporting agency shall not charge a fee for the placement or removal of a protected consumer security freeze.

	

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SECTION 4.  G.S. 75‑65 reads as rewritten:
"§ 75‑65.  Protection from security breaches.
(a)	Any business that owns or licenses personal information of residents of North Carolina or any business that conducts business in North Carolina that owns or licenses personal information in any form (whether computerized, paper, or otherwise) shall do all of the following:
(1)	Implement and maintain reasonable security procedures and practices, appropriate to the nature of the personal information and the size, complexity, and capabilities of the business, to protect the personal information from unauthorized access, destruction, use, modification, or disclosure.
(2)	Provide notice to all persons affected by a security breach as soon as practicable, but not later than 30 days after discovery of the breach or reason to believe a breach has occurred in accordance with this section.
(3)	Provide notice to the Consumer Protection Division of the Attorney General's Office that there has been a security breach as soon as practicable, but not later than 30 days after discovery of the breach or reason to believe a breach has occurred. The Consumer Protection Division may request any of the following information:
a.	A description of the policies in place regarding breaches.
b.	Steps taken to rectify the breach.
c.	A copy of the police report, if relevant.
d.	A summary of the incident report.
e.	A summary of the computer forensics report, if a forensic examination was undertaken.
f.	All information prescribed under subsections (e) and (e1) of this section.
The business shall provide notification of a security breach in a manner consistent with the legitimate needs of law enforcement as provided in subsection (c) of this section and consistent with any measures necessary to determine sufficient contact information, to determine the scope of the breach, and to restore the reasonable integrity, security, and confidentiality of the data system. The information provided to the Consumer Protection Division of the Attorney General's Office pursuant to subdivision (3) of this subsection is not a public record as defined in G.S. 132‑1.
For the purposes of this section, the term "personal information" does not include (i) electronic identification numbers or electronic mail names or addresses unless it includes any required security code, access code, or password that would allow access to an individual's financial account or resources or other personal information, as defined in this section, (ii) Internet identification names, (iii) parent's legal surname prior to marriage, or (iv) a password, unless the business is aware that this information would permit access to a person's financial account or resources or other personal information, as defined in this section.
(b)	Any business that maintains or possesses records or data containing personal information of residents of North Carolina that the business does not own or license, or any business that conducts business in North Carolina that maintains or possesses records or data containing personal information that the business does not own or license shall notify the owner or licensee of the information of any security breach immediately following discovery of the breach, consistent with the legitimate needs of law enforcement as provided in subsection (c) of this section.
(c)	The notice required by this section shall be delayed if a law enforcement agency informs the business that notification may impede a criminal investigation or jeopardize national or homeland security, provided that such request is made in writing or the business documents such request contemporaneously in writing, including the name of the law enforcement officer making the request and the officer's law enforcement agency engaged in the investigation. The notice required by this section shall be provided within five days after the law enforcement agency communicates to the business its determination that notice will no longer impede the investigation or jeopardize national or homeland security.
(d)	The notice shall be clear and conspicuous. The notice shall include all of the following:
(1)	A description of the incident in general terms.
(2)	A description of the type of personal information that was subject to the unauthorized access and acquisition.
(3)	A description of the general acts of the business to protect the personal information from further unauthorized access.
(4)	A telephone number for the business that the person may call for further information and assistance, if one exists.
(5)	Advice that directs the person to remain vigilant by reviewing account statements and monitoring free credit reports.
(6)	The toll‑free numbers and addresses for the major consumer reporting agencies.
(7)	The toll‑free numbers, addresses, and Web site addresses for the Federal Trade Commission and the North Carolina Attorney General's Office, along with a statement that the individual can obtain information from these sources about preventing identity theft.
(e)	For purposes of this section, notice to affected persons may be provided by one of the following methods:
(1)	Written notice.
(2)	Electronic notice, for those persons for whom it has a valid e‑mail address and with whom it regularly conducts business electronically or who have agreed to receive communications electronically if the notice provided is consistent with the provisions regarding electronic records and signatures for notices legally required to be in writing set forth in 15 U.S.C. § 7001.
(3)	Telephonic notice provided that contact is made directly with the affected persons.
(4)	Substitute notice, if the business demonstrates that the cost of providing notice would exceed two hundred fifty thousand dollars ($250,000) or that the affected class of subject persons to be notified exceeds 500,000, or if the business does not have sufficient contact information or consent to satisfy subdivisions (1), (2), or (3) of this subsection, for only those affected persons without sufficient contact information or consent, or if the business is unable to identify particular affected persons, for only those unidentifiable affected persons. Substitute notice shall consist of all the following:
a.	E‑mail notice when the business has an electronic mail address for the subject persons.
b.	Conspicuous posting of the notice on the Web site page of the business, if one is maintained.
c.	Notification to major statewide media.
(e1)	In the event a business provides notice to an affected person pursuant to this section, the business shall notify without unreasonable delay the Consumer Protection Division of the Attorney General's Office of the nature of the breach, the number of consumers affected by the breach, steps taken to investigate the breach, steps taken to prevent a similar breach in the future, and information regarding the timing, distribution, and content of the notice.
	
(g)	Any waiver of the provisions of this Article is contrary to public policy and is void and unenforceable.
(g1)	A person or agency that is subject to and in compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Public Law 104‑191, as amended and with regulations promulgated under that Act, shall be deemed in compliance with this section. If notice of a security breach is provided to any affected person or agency pursuant to HIPAA, then notice shall also be provided to the Consumer Protection Division in the Office of the Attorney General.
(h)	A financial institution that is subject to and in compliance with the Federal Interagency Guidance Response Programs for Unauthorized Access to Consumer Information and Customer Notice, issued on March 7, 2005, by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision; or a credit union that is subject to and in compliance with the Final Guidance on Response Programs for Unauthorized Access to Member Information and Member Notice, issued on April 14, 2005, by the National Credit Union Administration; and any revisions, additions, or substitutions relating to any of the said interagency guidance, shall be deemed to be in compliance with this section.
(h1)	If a consumer receives notice under this section or is the subject of a security breach by a consumer reporting agency, and the consumer's personal information was held by a consumer reporting agency, then that consumer reporting agency shall offer to provide appropriate identity theft prevention and mitigation services such as credit monitoring at no cost to the consumer for not less than 48 months. The consumer reporting agency shall provide the consumer with information necessary to take advantage of the offer.
(h2)	If a business knows or has reason to know that said business experienced a security breach that requires notice under this section and the security breach includes a person's social security number, the business shall contract with a third party to offer to each person whose social security number was disclosed in the security breach or is reasonably believed to have been disclosed in the security breach, credit monitoring services at no cost to the person for a period of not less than 24 months.
(h3)	A consumer reporting agency shall not knowingly offer a paid product to prevent unauthorized access or restrict access to a consumer's credit unless, at the time of the transaction, the consumer reporting agency (i) notifies the consumer of the availability of obtaining a security freeze without charge and (ii) provides information to the consumer on how to obtain a security freeze.
(i)	A violation of this section is a violation of G.S. 75‑1.1. No private right of action may be brought by an individual for a violation of this section unless such individual is injured as a result of the violation.
(j)	Causes of action arising under this Article may not be assigned."
SECTION 5.  G.S. 75‑66 reads as rewritten:
"§ 75‑66.  Publication of personal information.
(a)	It shall be a violation of this section for any person to knowingly broadcast or publish to the public on radio, television, cable television, in a writing of any kind, or on the Internet, the personal information of another with actual knowledge that the person whose personal information is disclosed has previously objected to any such disclosure.
(b)	As used in this section, "person" means any individual, partnership, corporation, trust, estate, cooperative, association, or other entity, but does not include any:
(1)	Government, government subdivision or agency.
(2)	Entity subject to federal requirements pursuant to the Health Insurance Portability and Accountability Act (HIPAA).

	

	

	

	
	
(c1)	For the purposes of this section, the phrase "personal information" does not include any of the following:
(1)	Electronic identification numbers or electronic mail names or addresses unless it includes any required security code, access code, or password that would allow access to an individual's financial account or resources or other personal information, as defined in G.S. 75‑61(10).
(2)	Internet identification names.
(3)	Parent's legal surname prior to marriage.
(4)	A password, unless the business is aware that this information would permit access to a person's financial account or resources or other personal information, as defined in G.S. 75‑61.
(d)	Nothing in this section shall:
(1)	Limit the requirements or obligations under any other section of this Article, including, but not limited to, G.S. 75‑62 and G.S. 75‑65.
(2)	Apply to the collection, use, or release of personal information for a purpose permitted, authorized, or required by any federal, State, or local law, regulation, or ordinance.
(3)	Apply to data integration efforts to implement the State's business intelligence strategy as provided by law or under contract.
(e)	Any person whose property or person is injured by reason of a violation of this section may sue for civil damages pursuant to the provisions of G.S. 1‑539.2C."
SECTION 6.  Article 2A of Chapter 75 of the General Statutes is amended by adding three new sections to read:
"§ 75‑67.  Consumer report consent.
A person shall not obtain, use, or seek the consumer report or credit score of a consumer in connection with an application for credit unless the user obtains the written, verbal, or electronic consent of the consumer, as appropriate to the manner in which the application for credit is made.
"§ 75‑68.  Right to request credit report.
A consumer has the right to request from the credit reporting agencies a listing of any of the information maintained on the consumer (both credit‑related and noncredit‑related information), the source of the information maintained, and a list of any person or entity that information was disclosed to. Violation of this section is a violation of G.S. 75‑1.1.
"§ 75‑69.  Conflict with Fair Credit Reporting Act.
In all cases of irreconcilable conflict between the provisions of this Article and the provisions of the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq., as amended, the provisions of the Fair Credit Reporting Act shall control."
SECTION 7.  G.S. 14‑113.20(b) reads as rewritten:
"(b)	The term "identifying information" as used in this Article includes the following:
(1)	Social security or employer taxpayer identification numbers.
(2)	Drivers license, State identification card, or passport numbers.
(3)	Checking account numbers.
(4)	Savings account numbers.
(5)	Credit card numbers.
(6)	Debit card numbers.
(7)	Personal Identification (PIN) Code as defined in G.S. 14‑113.8(6).
(8)	Electronic identification numbers, electronic mail names or addresses, or Internet identification names.
(9)	Digital signatures.
(10)	Any other numbers or information that can be used to access a person's financial resources.
(11)	Biometric data.
(12)	Fingerprints.
(13)	Passwords.
(14)	Parent's legal surname prior to marriage.
(15)	Health insurance policy number, subscriber identification number, or any other unique identifier used by a health insurer or payer to identify the person.
(16)	Any information regarding the individual's medical history or condition, medical treatment or diagnosis, or genetic information, by a health care professional."
SECTION 8.  This act is effective when it becomes law.