81R5998 ATP-F
By: Elkins H.B. No. 2069
A BILL TO BE ENTITLED
AN ACT
relating to a merchant's duties with respect to the use of a credit
card, debit card, stored value card, or other access device.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 12, Business & Commerce Code, as effective
April 1, 2009, is amended by adding Chapter 606 to read as follows:
CHAPTER 606. ACCEPTANCE OF CREDIT CARD, DEBIT CARD, STORED VALUE
CARD, OR OTHER ACCESS DEVICE
Sec. 606.001. DEFINITIONS. In this chapter:
(1) "Access device" means a card or device issued by a
financial institution that contains a magnetic stripe,
microprocessor chip, or other means for storing information. The
term includes a credit card, debit card, or stored value card.
(2) "Financial institution" means a bank, savings
association, savings bank, or credit union maintaining an office,
branch, or agency office in this state.
(3) "Merchant" means a person, other than a financial
institution, transacting business in this state who accepts an
access device in connection with a transaction.
Sec. 606.002. DUTY OF MERCHANT TO VERIFY IDENTITY OF ACCESS
DEVICE USER. A merchant shall implement and maintain reasonable
procedures, including taking appropriate corrective action, to
comply with best industry practices and standards with regard to:
(1) verifying the identity of an individual conducting
a transaction using an access device; and
(2) verifying that the individual conducting the
transaction is an authorized holder and user of the access device.
Sec. 606.003. DUTY OF MERCHANT TO COOPERATE WITH
INVESTIGATION. (a) When a fraudulent or unauthorized transaction
or activity is reported, the merchant who accepted the access
device in connection with the transaction shall reasonably
cooperate with the financial institution that issued the access
device or another related party in the investigation of that
fraudulent or unauthorized transaction or activity. For purposes
of this subsection, reasonable cooperation includes:
(1) producing relevant documents;
(2) facilitating an interview of relevant personnel;
and
(3) producing security or surveillance information
with regard to the unauthorized transaction.
(b) A merchant must comply with this section, regardless of
whether federal, state, or local law enforcement are involved in
the investigation of the fraudulent or unauthorized transaction or
activity.
Sec. 606.004. ACTION AGAINST MERCHANT. (a) A financial
institution may bring an action against a merchant who accepts an
access device in connection with a fraudulent or unauthorized
transaction if:
(1) at the time of the transaction, the merchant was
not in compliance with Section 606.002; or
(2) at the time of the investigation, the merchant did
not cooperate as required under Section 606.003.
(b) A financial institution that brings an action under this
section may obtain actual damages arising from the merchant's
violation of this chapter, costs, and attorney's fees. Actual
damages include any cost incurred by the financial institution in
connection with:
(1) the cancellation or reissuance of an access device
affected by the fraudulent or unauthorized transaction or activity;
(2) the closing of a deposit, transaction, share
draft, or other account affected by the fraudulent or unauthorized
transaction or activity and any action to stop payment or block a
transaction with respect to the account;
(3) the opening or reopening of a deposit,
transaction, share draft, or other account affected by the
fraudulent or unauthorized transaction or activity; and
(4) a refund or credit made to an account holder to
cover the cost of any fraudulent or unauthorized transaction or
activity.
SECTION 2. This Act takes effect September 1, 2009.