BILL NUMBER: AB 1219 AMENDED
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.