FACTA: More Preemption: Required Conduct Preemption

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David A. Szwak
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Joined: Tue Jul 26, 2005 4:15 am

FACTA: More Preemption: Required Conduct Preemption

Post by David A. Szwak »

[u55][b55]Required conduct preemptions. [/b55][/u55] The scope and extent of the preemption provisions will likely be a debated issue. In the context of identity theft, however Congress added language to the general preemption section of the statute which appears to preserve the right of states to legislate laws to protect consumers from identity theft. The relevant section states:

Except as provided in subsections (b) and (c), this title does not annul, alter, affect, or exempt any person subject to the provisions of this title from complying with the laws of any State with respect to the collection, distribution, or use of any information on consumers or for the prevention or mitigation of identity theft, except to the extent that those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency.

At first glance this is a positive change, however, several exceptions to this general proposition were added to specifically provide that no “requirement or prohibition” may be imposed “with respect to the conduct required by the specific provisions of - “

§605(g), requiring businesses to truncate credit/debit card numbers on electronic receipts.

§605A, requiring nationwide consumer reporting agencies to include fraud alerts and active duty alerts and to refer the alerts to other agencies, requiring resellers to reconvey to a consumer any fraud or active duty alert included in a report it obtains from another agency, requiring non-nationwide consumer reporting agencies to provide contact information for nationwide agencies to consumers, requiring alerts to include specified information, and requiring users to verify the identity of consumers whose reports contain fraud and active duty alert.

§605B, requiring agencies to block identity-theft related information and to notify the furnisher of such information that it has been blocked.

§609(a)(1)(A), allowing consumers to request that an agency not disclose the first 5 digits of their SSN’s in a report provided to the consumer.

§612(a), requiring agencies to provide consumers with a free annual report when requested through a to-be-established centralized source;

§615(e), requiring agencies to issue red flag guidelines and regulations.

§615(f), prohibiting the sale or transfer of identity theft debts.

§615(g), requiring debt collectors to notify creditors of fraudulent debts.

§621(f), requiring agencies to refer identity theft complaints and fraud alerts to each other.

§623(a)(6), requiring furnishers to have procedures for responding to identity theft notifications from agencies and prohibiting furnishers from re-submitting fraudulent information.

§628, requiring agencies to provide regulations that will require proper disposal of consumer information.
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