Bill Text: NJ S899 | 2010-2011 | Regular Session | Introduced
Bill Title: Concerns contracts for credit card accounts with certain individuals under 21 years of age.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced - Dead) 2010-02-01 - Introduced in the Senate, Referred to Senate Commerce Committee [S899 Detail]
Download: New_Jersey-2010-S899-Introduced.html
Sponsored by:
Senator NIA H. GILL
District 34 (Essex and Passaic)
SYNOPSIS
Concerns contracts for credit card accounts with certain individuals under 21 years of age.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning contracts for credit card accounts with certain individuals under 21 years of age, and supplementing P.L.1972, c.81 (C.9:17B-1 et seq.) and P.L.1960, c.39 (C.56:8-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. As used in this section, "credit card" means any tangible or intangible instrument or device issued with or without fee by an issuer that can be used, alone or in connection with another means of account access, in obtaining money, goods, services or anything else of value on credit, and includes a credit card, charge card, credit plate, account number, or any other means of account access on credit.
b. Notwithstanding the provisions of P.L.1972, c.81 (C.9:17B-1 et seq.) to the contrary, a person who is under 21 years of age, and is claimed as a dependent for tax purposes by a parent or legal guardian, shall not be deemed to be an adult with respect to entering into a contract for the use of a credit card, unless the person obtains the contract with the written consent of, or co-signing by, that parent or legal guardian, as set forth in section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
2. It shall be an unlawful practice for any person to knowingly issue a credit card, as defined in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), to an individual who is under 21 years of age and is claimed as a dependent for tax purposes by a parent or legal guardian without the written consent of, or co-signing by, that parent or legal guardian, as set forth in section 3 of P.L. , c. , (C. ) (pending before the Legislature as this bill).
3. An application for a credit card, as defined in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), by an individual who is under 21 years of age as of the date of submission of the application, and who is claimed as a dependent for tax purposes by a parent or legal guardian, shall require:
a. The signature of that parent or legal guardian, indicating the consent of, or co-signing by, the parent or guardian for the applicant to be issued a credit card; and
b. Submission by the applicant of financial information indicating means of repaying any obligation arising from the proposed extension of credit in connection with the credit card that is independent of the consenting or co-signing parent or legal guardian.
4. Any contract for a credit card obtained by an individual who is under 21 years of age with a consenting or co-signing parent or legal guardian pursuant to P.L. , c. (C. ) (pending before the
Legislature as this bill), shall expire within 60 days after that individual attains the age of 21, unless continued based upon a renewal of the contract as only between the individual, now 21 years of age, and the person who issued the credit card.
5. This act shall take effect on the first day of the fourth month next following enactment, and shall apply to any credit card issued on or after the effective date.
STATEMENT
This bill concerns contracts for credit card accounts with individuals under 21 years of age, who are claimed as dependents for tax purposes by a parent or legal guardian.
Specifically, the bill provides that, notwithstanding the general authority to contract as an adult at the age of 18, granted pursuant to the provisions of P.L.1972, c.81 (C.9:17B-1 et seq.), a person who is under 21 years of age and is claimed as a dependent for tax purposes by a parent or legal guardian shall not be deemed an adult with respect to entering into a contract for the use of a credit card, unless the person obtains the contract with the written consent of, or co-signing by, that parent or legal guardian. Under New Jersey law, a contract with a person who is a child is voidable, and thus may be unenforceable against that child. See R.J. Goerke Co. v. Nicolson, 5 N.J. Super. 412 (App. Div. 1949).
In addition, the bill makes it an unlawful practice and violation of the consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.), for any person to knowingly issue a credit card to a person under 21 years of age and claimed as a dependent, without the written consent of, or co-signing by, the parent or legal guardian. Any application from such a person shall require the signature of the parent or legal guardian indicating consent, or co-signing, for the issuance of the credit card, and the submission of financial information indicating any means of repaying any obligation arising from the proposed extension of credit that is independent of the consenting or co-signing parent or legal guardian.
Further, any contract for a credit card obtained by an individual who is under 21 years of age with a consenting or co-signing parent or legal guardian shall expire within 60 days after that individual attains the age of 21, unless continued based upon a renewal of the contract between the individual, now 21 years of age, and the person who issued the credit card.
Any knowing violation of the bill shall be an unlawful practice under the consumer fraud act. Thus, any person who violates any of the provisions of the bill shall be punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense. In addition, a violation may result in cease and desist orders issued by the Attorney General, and the awarding of treble damages, attorney's fees and costs of suit to an aggrieved party.
