82R7908 JE-F
By: Elkins H.B. No. 3243
A BILL TO BE ENTITLED
AN ACT
relating to a merchant's duty to cooperate with a law enforcement
investigation of fraudulent or unauthorized use of a credit or
debit card or other access device.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 12, Business & Commerce Code, is amended by
adding Chapter 606 to read as follows:
CHAPTER 606. INVESTIGATION OF CREDIT CARD, DEBIT CARD, OR OTHER
ACCESS DEVICE FRAUD
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 that accepts an
access device in connection with a transaction.
Sec. 606.002. DUTY OF MERCHANT TO COOPERATE WITH
INVESTIGATION. When a fraudulent or unauthorized transaction or
activity involving an access device is reported to a federal,
state, or local law enforcement agency, the merchant that accepted
the access device in connection with the transaction shall
reasonably cooperate with the law enforcement agency in the
investigation of that transaction or activity. For purposes of
this subsection, reasonable cooperation includes:
(1) facilitating an interview of relevant personnel;
and
(2) producing security or surveillance information,
if any, with regard to the unauthorized transaction or activity.
Sec. 606.003. ACTION AGAINST MERCHANT. (a) A financial
institution may bring an action against a merchant that accepts an
access device in connection with a fraudulent or unauthorized
transaction if at the time of the investigation, the merchant
wilfully refuses to reasonably cooperate with a law enforcement
agency as required under Section 606.002.
(b) A financial institution that brings an action under this
section may recover actual damages arising from the merchant's
violation of this chapter. 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;
and
(2) 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, 2011.