BILL NUMBER: AB 1677	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 2, 2007
	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: banking and 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 require a  service provider, 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  
business that provides banking or other financial services over the
Internet to implement and maintain reasonable policies and procedures
for authenticating and verifying the legitimacy  of a consumer
transaction over the Internet, and would  impose
 allow  penalties  to be imposed  on 
service providers who   businesses that  fail to
meet this requirement  , as specified  .
   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.   A business that
provides banking or other financial services over the Internet shall
implement and maintain reasonable policies and procedures for
authenticating and verifying the legitimacy of a consumer transaction
made 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. 

   (b) A civil penalty in the amount of three thousand dollars
($3,000) may be imposed on a business that fails to conduct an
Internet transaction with a consumer in compliance with the policies
and procedures required pursuant to subdivision (a).  
   (d) 
    (c)  Any customer injured by a fraudulent transaction in
violation of the  reasonable care standard established by
this section   requirement specified in subdivision (a)
 may institute a civil action to recover damages. 
   (e) 
    (d)  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.