BILL NUMBER: AB 1677	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 10, 2007

INTRODUCED BY   Assembly Member Charles Calderon

                        FEBRUARY 23, 2007

   An act  to add Section 1798.825 to the Civil Code, 
relating to Internet transactions.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1677, as amended, Charles Calderon. Internet transactions:
 verification.   verification: banking an 
 d financial services. 
   Existing law sets forth comprehensive provisions governing funds
transfers, as defined, including provisions related to the issuance
and acceptance of payment orders, requirements for verification, the
effect of errors, the effect of acceptance of a payment order, and
related provisions.
   This bill would  declare the intent of the Legislature to
enact legislation requiring   require  a service
provider  to contact the person by recorded telephone call in
order to confirm a high value transaction over the Internet, and to
  , defined as a person or business doing business in
  California that provides banking or other financial
services over the Internet, to use reasonable care, as specified, in
confirming the legitimacy of a consumer transaction over the
Internet, and would  impose penalties on service providers who
fail to meet this requirement  and on persons who confirm
fraudulent transactions  .
   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 1798.825 is added to the 
 Civil Code   , to read:  
   1798.825.  (a) A service provider is required to use reasonable
care in confirming the legitimacy of a consumer transaction over the
Internet.
   (b) A service provider satisfies the requirement of reasonable
care if the service provider confirms the transaction by out of band
real time identity verification.
   (c) A civil penalty in the amount of ____ may be imposed on a
service provider who fails to meet the requirement of reasonable care
when completing an Internet transaction with a consumer.
   (d) Any customer injured by a fraudulent transaction in violation
of the reasonable care standard established by this section may
institute a civil action to recover damages.
   (e) The rights and remedies under this section are cumulative with
each other and with any other rights and remedies under law.
   (f) For purposes of this section:
   (1) "Out of band" means any process by which consumer identity is
verified through contact other than through the use of an Internet
transmission.
   (2) "Real time" means any process that accomplishes verification
prior to or simultaneous to the completion of the Internet
transaction.
   (3) "Service provider" means any person or business doing business
in California that provides banking or other financial services over
the Internet.  
  SECTION 1.    It is the intent of the Legislature
to enact legislation requiring that, when a person initiates a high
value transaction over the Internet, the service provider contact the
person by recorded telephone call, in real-time, in order to confirm
that the transaction is legitimate. It is the intent of the
Legislature that the legislation would impose penalties on service
providers that fail to meet this requirement with regard to
transactions that are claimed to be fraudulent, and would impose
strict penalties on persons who use these telephone calls to confirm
a fraudulent transaction.