Bill to Protect Consumer Privacy, Prevent Identity Fraud Clears Assembly Panel

TRENTON — Legislation sponsored by Assemblyman Bob Andrzejczak to help protect sensitive consumer information was released Thurs. by an Assembly panel.
The bill, called the Personal Information and Privacy Protection Act, was prompted by a Star Ledger consumer-beware report about the personal information that is collected when a driver’s license is scanned and how that information is stored and used by businesses.
“Consumers are expected to trust companies and their employees with sensitive information, but how can we be sure that this information is being guarded properly?” asked Andrzejczak (D-Cape May/Atlantic/Cumberland). “Unless it falls under one of the exceptions mandated in the bill, there is no reason for a company to scan your license and have access to your personal information.”
The bill (A-3946) restricts the way retail establishments may collect and use the personal information contained in the electronic data embedded in identification cards, such as driver’s licenses.
Businesses commonly engage in the practice of “scanning” the barcodes on identification cards for purposes of verifying the authenticity of the card, verifying a consumer’s age and identity, and preventing fraudulent merchandise return practices. Current identity theft law only provides that a consumer and the state police must be notified in the case of a security breach related to a computerized record of personal information.
The bill sets forth the purposes for which identification cards may be scanned by retail establishments and describes the information that may be gathered by scanning. Under the bill, a retail establishment may scan a person’s identification card only for the following purposes:
• to verify the authenticity of the card or to verify the age or identity of the person in certain circumstances;
• to prevent fraud or other criminal activity, in the case of merchandise return or exchange, via a fraud prevention service company or system;
• to establish or maintain a contractual relationship.
• to record, retain, or transmit information as required by state or federal law;
• to transmit information to a consumer reporting agency, financial institution, or debt collector to be used as permitted by federal law; or
• to record, retain, or transmit information by a covered entity governed by medical privacy and security rules established pursuant to federal law.
Information that may be collected is limited to the person’s name, address, date of birth, and identification card number. The bill also specifies that any information collected, which may be retained by a retail establishment, must be securely stored and any security breach of the information must be reported to any affected person and the state police in compliance with current law.
A violation of the bill’s provisions will result in a civil penalty of $2,500 for a first offense and $5,000 for any subsequent offense. Additionally, the bill provides that any person aggrieved by a violation may bring an action in Superior Court to recover damages.
The bill was released by the Assembly Consumer Affairs Committee.