California Assembly Bill AB1219 Amended / Bill

 BILL NUMBER: AB 1219AMENDED BILL TEXT AMENDED IN ASSEMBLY MAY 17, 2011 AMENDED IN ASSEMBLY MAY 4, 2011 AMENDED IN ASSEMBLY APRIL 25, 2011 AMENDED IN ASSEMBLY MARCH 29, 2011 INTRODUCED BY Assembly Member Perea FEBRUARY 18, 2011 An act to amend Section 1747.08 of the Civil Code, relating to credit cards. LEGISLATIVE COUNSEL'S DIGEST AB 1219, as amended, Perea. Credit cards: personal information. Existing state and federal law regulate the provision of credit and the use of credit cards. Existing state law prohibits a person, firm, partnership, association, or corporation that accepts credit cards for the transaction of business from requesting or requiring the cardholder to provide personal identification information, which is then recorded, as a condition to accepting the credit card as payment in full or in part for goods or services, but provides various exceptions to this prohibition. Existing law excepts from this prohibition the instance when the person or entity accepting the card is contractually obligated to provide personal identification information in order to complete the transaction or is obligated to collect and record the identification information by federal law. Existing law also permits a person or entity accepting a credit card to record the cardholder's driver's license number or identification card number if the cardholder pays for the transaction with a credit card number and does not make the credit card available upon request to verify the number. This bill would  condition the prohibition described above upon the cardholder physically presenting a credit card with a properly functioning magnetic stripe or other electronically readable device. The bill would  except from the prohibition described above the instance when the person or entity accepting the card uses the personal information for prevention of fraud, theft, or identity theft and would specify that state law obligations are also permissible reasons to collect and record personal information.  The bill also would except from the prohibition instances when the person or entity accepting the card requests personal information for purposes of verifying a proprietary   credit card and the cardholder does not produce it and face-to-face transactions when the credit card does not have a functioning magnetic stripe or is not otherwise electronically readable, subject to specified limitations.  The bill would delete the authorization of a person or entity accepting a credit card to record the cardholder's driver's license number or identification card number if the cardholder pays for the transaction with a credit card number and does not make the credit card available. The bill would also make a statement of intent with regard to certain of these provisions. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1747.08 of the Civil Code is amended to read: 1747.08. (a) Except as provided in subdivision (c),  if a cardholder physically presents a credit card to an employee, authorized agent, or representative of a person, firm, partnership, association, or corporation as payment, and the credit card has a properly functioning magnetic stripe or other electronically readable device, the   no  person, firm, partnership, association, or corporation that accepts credit cards for the transaction of business shall  not  do any of the following: (1) Request, or require as a condition to accepting the credit card as payment in full or in part for goods or services, the cardholder to write any personal identification information upon the credit card transaction form or otherwise. (2) Request, or require as a condition to accepting the credit card as payment in full or in part for goods or services, the cardholder to provide personal identification information, which the person, firm, partnership, association, or corporation accepting the credit card writes, causes to be written, or otherwise records upon the credit card transaction form or otherwise. (3) Utilize, in any credit card transaction, a credit card form which contains preprinted spaces specifically designated for filling in any personal identification information of the cardholder. (b) For purposes of this section "personal identification information," means information concerning the cardholder, other than information set forth on the credit card, and including, but not limited to, the cardholder's address and telephone number. (c) Subdivision (a) does not apply in the following instances: (1) If the credit card is being used as a deposit to secure payment in the event of default, loss, damage, or other similar occurrence. (2) Cash advance transactions. (3) If any of the following applies:  (1) The person, firm, partnership, association, or corporation accepting the credit card:  (A)  Is   The person, firm, partnership, association, or corporation accepting the credit card is  contractually obligated to provide personal identification information in order to complete the credit card transaction. (B)  Uses   The person, firm, partnership, association, or corporation accepting the credit card uses  the personal  identification  information solely for prevention of fraud, theft, or identity theft or uses the personal information for any of these purposes concurrently with a purpose permitted under paragraph (4). (C)  Is   The person, firm, partnership,   association, or corporation accepting the credit card is  obligated to collect and record the personal identification information by federal or state law or regulation. (4) If personal identification information is required for a special purpose incidental but related to the individual credit card transaction, including, but not limited to, information relating to shipping, delivery, servicing, or installation of the purchased merchandise, or for special orders.  (5) If personal identification information is requested to verify that a person has a proprietary credit card account with the person, firm, partnership, association, or corporation and that person does not produce the proprietary credit card at the time of the transaction. For purposes of this paragraph a "proprietary credit card" means a credit card issued by the person, firm, partnership, association, or corporation.   (6) If, in a face-to-face transaction, the credit card does not have a properly functioning magnetic stripe or is otherwise not electronically readable, the person, firm, partnership, association, or corporation may record only the cardholder's name, credit card account number, and expiration date; and provided further that the personal identification information that is required is used only to complete the transaction, or for a purpose authorized by this section, and is thereafter deleted, discarded, or destroyed.  (d) This section does not prohibit any person, firm, partnership, association, or corporation from requiring the cardholder, as a condition to accepting the credit card as payment in full or in part for goods or services, to provide reasonable forms of positive identification, which may include a driver's license or a California state identification card, or where one of these is not available, another form of photo identification, provided that none of the information contained thereon is written or recorded on the credit card transaction form or otherwise. (e) Any person who violates this section shall be subject to a civil penalty not to exceed two hundred fifty dollars ($250) for the first violation and one thousand dollars ($1,000) for each subsequent violation, to be assessed and collected in a civil action brought by the person paying with a credit card, by the Attorney General, or by the district attorney or city attorney of the county or city in which the violation occurred. However, no civil penalty shall be assessed for a violation of this section if the defendant shows by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error made notwithstanding the defendant's maintenance of procedures reasonably adopted to avoid that error. When collected, the civil penalty shall be payable, as appropriate, to the person paying with a credit card who brought the action, or to the general fund of whichever governmental entity brought the action to assess the civil penalty. (f) The Attorney General, or any district attorney or city attorney within his or her respective jurisdiction, may bring an action in the superior court in the name of the people of the State of California to enjoin violation of subdivision (a) and, upon notice to the defendant of not less than five days, to temporarily restrain and enjoin the violation. If it appears to the satisfaction of the court that the defendant has, in fact, violated subdivision (a), the court may issue an injunction restraining further violations, without requiring proof that any person has been damaged by the violation. In these proceedings, if the court finds that the defendant has violated subdivision (a), the court may direct the defendant to pay any or all costs incurred by the Attorney General, district attorney, or city attorney in seeking or obtaining injunctive relief pursuant to this subdivision. (g) Actions for collection of civil penalties under subdivision (e) and for injunctive relief under subdivision (f) may be consolidated. (h) The changes made to this section by Chapter 458 of the Statutes of 1995 apply only to credit card transactions entered into on and after January 1, 1996. Nothing in those changes shall be construed to affect any civil action which was filed before January 1, 1996. (i) It is the intent of the amendments made by the act adding this subdivision to clarify existing law. These clarifying amendments continue to protect personal identification information while allowing and recognizing the legitimate business need for a person, firm, partnership, association, or corporation that accepts credit cards for the transaction of business to use personal identification information  to appropriately process and complete all components of customer transactions and to protect consumers against criminal activity, such as identity theft, which is currently the largest source of consumer complaints to the Federal Trade Commission   for the purposes   authorized by this section  . These amendments recognize, in part, legitimate business practices designed to address the increased potential for identity theft that results if the cardholder is not present or if the credit card does not function correctly.