Amended in Assembly April 24, 2013

Amended in Assembly April 15, 2013

Amended in Assembly March 19, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 844

Introduced by Assembly Member Dickinson

February 21, 2013

An act to amend Sections 1747.02, 1747.08, 1747.09, and 1748.30 of, and to add Section 1747.08.1 to, the Civil Code, and to amend Section 99030 of the Education Code, relating to credit and debit cards.

LEGISLATIVE COUNSEL’S DIGEST

AB 844, as amended, Dickinson. Credit and debit cards: transactions: 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.

Under existing law, a person who violates the above provisions is subject to specified civil penalties, an action for injunctive relief, or both.

This bill would extend the above restrictions regarding the collection of personal identification information to debit cards. The bill would define “debit card” and related terms for these purposes, and would make conforming changes.

This bill would permit the operator of a commercial Internet Web site or online service that collects personal identifiable information, as defined, to require a credit cardholder or debit cardholder to provide only a ZIP Code to complete the Internet credit card or debit card transaction, if used solely for the prevention of fraud, theft, or identity theft, except under specified circumstances. The bill would require that operator to destroy the ZIP Code information so collected, as specified, and would prohibit the operator from aggregating or sharing the ZIP Code information, as specified. The bill would authorize the assessment of civil penalties or an action for injunctive relief, or both, for a violation of these provisions.

Existing law prohibits a person, firm, partnership, association, corporation, or limited liability company that accepts credit or debit cards for the transaction of business from printing more than the last 5 digits of an individual’s credit card or debit card number, or the expiration date, on a transaction receipt, as specified.

This bill would revise the above provisions to remove specific references to printed receipts, and would make other conforming changes.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1747.02 of the Civil Code is amended
to read:

1747.02.  

As used in this title:

(a) “Credit card” means any card, plate, coupon book, or other
single credit device existing for the purpose of being used from
time to time to obtain money, property, labor, or services on credit.
“Credit card” does not mean any of the following:

(1) Any single credit device used to obtain telephone property,
labor, or services in any transaction under public utility tariffs.

(2) Any device that may be used to obtain credit pursuant to an
electronic fund transfer, but only if the credit is obtained under an
agreement between a consumer and a financial institution to extend
credit when the consumer’s asset account is overdrawn or to
maintain a specified minimum balance in the consumer’s asset
account.

(3) Any key or card key used at an automated dispensing outlet
to obtain or purchase petroleum products, as defined in subdivision
(c) of Section 13401 of the Business and Professions Code, that
will be used primarily for business rather than personal or family
purposes.

(b) “Accepted credit card” means any credit card that the
cardholder has requested or applied for and received or has signed,
or has used, or has authorized another person to use, for the purpose
of obtaining money, property, labor, or services on credit. Any
credit card issued in renewal of, or in substitution for, an accepted
credit card becomes an accepted credit card when received by the
cardholder, whether the credit card is issued by the same or a
successor card issuer.

(c) “Debit card” means an accepted debit card or other means
of access to a debit cardholder’s account that may be used to initiate
electronic funds transfers and may be used without unique
identifying information such as a personal identification number
to initiate access to the debit cardholder’s account.

(d) “Accepted debit card” means a debit card that the debit
cardholder has requested and received or has signed, or has used,
or has authorized another person to use, for the purpose of
obtaining money, property, labor, or services. Any debit card issued
in renewal of, or in substitution for, an accepted debit card becomes
an accepted debit card when received by the debit cardholder,
whether the debit card is issued by the same or by a successor card
issuer.

(e) “Card issuer” means any person who issues a credit card or
the agent of that person for that purpose with respect to the credit
card.

(f) “Cardholder” means a natural person to whom a credit card
is issued for consumer credit purposes, or a natural person who
has agreed with the card issuer to pay consumer credit obligations
arising from the issuance of a credit card to another natural person.
For purposes of Sections 1747.05, 1747.10, and 1747.20, the term
includes any person to whom a credit card is issued for any
purpose, including business, commercial, or agricultural use, or a
person who has agreed with the card issuer to pay obligations
arising from the issuance of that credit card to another person.

(g) “Debit card issuer” means any person who issues a debit
card or the agent of that person for that purpose.

(h) “Debit cardholder” means a natural person to whom a debit
card is issued.

(i) “Retailer” means every person other than a card issuer or
debit card issuer who furnishes money, goods, services, or anything
else of value. “Retailer” does not mean the state, a county, city,
city and county, or any other public agency.

(j) “Unauthorized use” means the use of a credit card or debit
card by a person, other than the cardholder or debit cardholder,
(1) who does not have actual, implied, or apparent authority for
that use and (2) from which the cardholder or debit cardholder
receives no benefit. “Unauthorized use” does not include the use
of a credit card or debit card by a person who has been given
authority by the cardholder or debit cardholder to use the credit
card or debit card. Any attempted termination by the cardholder
or debit cardholder of the person’s authority is ineffective as against
the card issuer or debit card issuer until the cardholder or debit
cardholder complies with the procedures required by the card issuer
or debit card issuer to terminate that authority. Notwithstanding
the above, following the card issuer’s or debit card issuer’s receipt
of oral or written notice from a cardholder or debit cardholder
indicating that it wishes to terminate the authority of a previously
authorized user of a credit card or debit card, the card issuer or
debit card issuer shall follow its usual procedures for precluding
any further use of a credit card or debit card by an unauthorized
person.

(k) “Inquiry” means a writing that is posted by mail to the
address of the card issuer or debit card issuer to which payments
are normally tendered, unless another address is specifically
indicated on the statement for that purpose, then to that other
address, and that is received by the card issuer or debit card issuer
no later than 60 days after the card issuer transmitted the first
periodic statement that reflects the alleged billing error, and that
does all of the following:

(1) Sets forth sufficient information to enable the card issuer or
debit card issuer to identify the cardholder or debit cardholder and
the account.

(2) Sufficiently identifies the billing error.

(3) Sets forth information providing the basis for the
cardholder’s or debit cardholder’s belief that the billing error exists.

(l) “Response” means a writing that is responsive to an inquiry
and mailed to the cardholder’s or debit cardholder’s address last
known to the card issuer or debit card issuer.

(m) “Timely response” means a response that is mailed within
two complete billing cycles, but in no event later than 90 days,
after the card issuer or debit card issuer receives an inquiry.

(n) “Billing error” means an error by omission or commission
in (1) posting any debit or credit, or (2) in computation or similar
error of an accounting nature contained in a statement given to the
cardholder or debit cardholder by the card issuer or debit card
issuer. A “billing error” does not mean any dispute with respect
to value, quality, or quantity of goods, services, or other benefit
obtained through use of a credit card or debit card.

(o) “Adequate notice” means a printed notice to a cardholder
or debit cardholder that sets forth the pertinent facts clearly and
conspicuously so that a person against whom it is to operate could
reasonably be expected to have noticed it and understood its
meaning.

(p) “Secured credit card” means any credit card issued under
an agreement or other instrument that pledges, hypothecates, or
places a lien on real property or money or other personal property
to secure the cardholder’s obligations to the card issuer.

(q) “Student credit card” means any credit card that is provided
to a student at a public or private college or university and is
provided to that student solely based on his or her enrollment in a
public or private university, or is provided to a student who would
not otherwise qualify for that credit card on the basis of his or her
income. A “student credit card” does not include a credit card
issued to a student who has a cocardholder or cosigner who would
otherwise qualify for a credit card other than a student credit card.

(r) “Retail motor fuel dispenser” means a device that dispenses
fuel that is used to power internal combustion engines, including
motor vehicle engines, that processes the sale of fuel through a
remote electronic payment system, and that is in a location where
an employee or other agent of the seller is not present.

(s) “Retail motor fuel payment island automated cashier” means
a remote electronic payment processing station that processes the
retail sale of fuel that is used to power internal combustion engines,
including motor vehicle engines, that is in a location where an
employee or other agent of the seller is not present, and that is
located in close proximity to a retail motor fuel dispenser.

SEC. 2.  

Section 1747.08 of the Civil Code is amended to read:

1747.08.  

(a) Except as provided in subdivision (c), no person,
firm, partnership, association, or corporation that accepts credit
cards or debit cards for the transaction of business shall do any of
the following:

(1) Request, or require as a condition to accepting the credit
card or debit card as payment in full or in part for goods or services,
the cardholder or debit cardholder to provide any personal
identification information.

(2) Request, or require as a condition to accepting the credit
card or debit card as payment in full or in part for goods or services,
the cardholder or debit cardholder to provide personal identification
information, which the person, firm, partnership, association, or
corporation accepting the credit card or debit card collects, causes
to be collected, or otherwise records upon the credit card or debit
card transaction template or otherwise.

(3) Utilize, in any credit card or debit card transaction, a credit
card or debit card template which contains spaces specifically
designated for filling in any personal identification information of
the cardholder or debit cardholder.

(b) For purposes of this section “personal identification
information,” means information concerning the cardholder or
debit cardholder, other than information set forth on the credit card
or debit card, and including, but not limited to, the cardholder’s
or debit cardholder’s address and telephone number.

(c) Subdivision (a) does not apply in the following instances:

(1) If the credit card or debit 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:

(A) The person, firm, partnership, association, or corporation
accepting the credit card or debit card is contractually obligated
to provide personal identification information in order to complete
the credit card or debit card transaction.

(B) The person, firm, partnership, association, or corporation
accepting the credit card or debit card in a sales transaction at a
retail motor fuel dispenser or retail motor fuel payment island
automated cashier uses the ZIP Code information solely for
prevention of fraud, theft, or identity theft.

(C) The person, firm, partnership, association, or corporation
accepting the credit card or debit 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 or debit
card transaction, including, but not limited to, information relating
to shipping, delivery, servicing, or installation of the purchased
merchandise, or for special orders.

(d) This section does not prohibit any person, firm, partnership,
association, or corporation from requiring the cardholder or debit
cardholder, as a condition to accepting the credit card or debit 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 collected
or recorded on the credit card or debit card transaction template
or otherwise. If the cardholder or debit cardholder pays for the
transaction with a credit card or debit card number and does not
make the credit card or debit card available upon request to verify
the number, the cardholder’s or debit cardholder’s driver’s license
number or identification card number may be recorded on the
credit card or debit card transaction 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 or debit 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 or debit 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.

SEC. 3.  

Section 1747.08.1 is added to the Civil Code, to read:

1747.08.1.  

(a) An operator of a commercial Internet Web site
or online service that collects personal identifiable information for
a credit card or debit card transaction may require a cardholder or
debit cardholder, as a condition to accepting a credit card or debit
card as payment in full or in part in an online transaction, to provide
only the billing ZIP Code number associated with the credit card
or debit card, if used solely for the prevention of fraud, theft, or
identity theft. An operator of a commercial Internet Web site or
online service accepting the credit card or debit card shall destroy
or dispose of the ZIP Code in a secure manner after it is no longer
needed for the prevention of fraud, theft, or identity theft. An
operator of a commercial Internet Web site or online service
accepting the credit card or debit card may not aggregate the ZIP
Code with any other personal identifiable information and may
not share the ZIP Code with any other operator of a commercial
Internet Web site or online service.

(b) Subdivision (a) does not apply to any of the following:

(1) Instances in which the credit card or debit 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) Instances in which any of the following applies:

(A) An operator of a commercial Internet Web site or online
service is contractually obligated to provide personal identifiable
information in order to complete the credit card or debit card
transaction.

(B) An operator of a commercial Internet Web site or online
service is obligated to collect and record the personal identifiable
information by federal or state law or regulation.

(C) An operator of a commercial Internet Web site or online
service maintains begin delete a preexisting end delete begin insert an end insert account associated with the
cardholder or debit cardholder where the cardholder or debit
cardholder begin delete has previously provided end delete begin insert provides end insert personal identifiable
information as part of the begin delete creation of an end delete account on the commercial
Internet Web site or online service.

(4) Instances in which personal identifiable information is
required for a special purpose incidental but related to the
individual credit card or debit card transaction, including, but not
limited to, information relating to shipping, delivery, servicing, or
installation of the purchased merchandise, or for special orders.

(c) For purposes of this section, the following definitions apply:

(1) “Personal identifiable information” means individually
identifiable information concerning a cardholder or debit
cardholder, other than information set forth on the credit card or
debit card, collected online by the operator from that cardholder
or debit cardholder, including, but not limited to, the following:

(A) Home or other physical address, including street name and
name of a city or town.

(B) Email address.

(C) Telephone number.

(2) “Operator” means a person or entity and any and all affiliated
corporate entities that own an Internet Web site or an online service
that collects and maintains personal identifiable information from
a cardholder or debit cardholder residing in California who uses
or visits the Internet Web site or online service if the Internet Web
site or online service is operated for commercial purposes.

(d) (1) A 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 or debit card, by
the Attorney General, or by the district attorney or city attorney
of the county or city in which the violation occurred.

(2) Notwithstanding paragraph (1), a civil penalty shall not 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.

(3)  When collected, the civil penalty shall be payable, as
appropriate, to the person paying with a credit card or debit card
who brought the action, or to the general fund of the governmental
entity that brought the action to assess the civil penalty.

(e) 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.

(f) Actions for collection of civil penalties under subdivision
(d) and for injunctive relief under subdivision (e) may be
consolidated.

(g) This section shall apply only to credit card and debit card
transactions entered into on and after January 1, 2014. This section
shall not be construed to affect any civil action that was filed before
January 1, 2014.

SEC. 4.  

Section 1747.09 of the Civil Code is amended to read:

1747.09.  

(a) Except as provided in this section, no person,
firm, partnership, association, corporation, or limited liability
company that accepts credit or debit cards for the transaction of
business shall display more than the last five digits of the credit
or debit card account number or the expiration date upon any of
the following:

(1) Any receipt provided to the cardholder.

(2) Any receipt retained by the person, firm, partnership,
association, corporation, or limited liability company.

(3) Any receipt retained by the person, firm, partnership,
association, corporation, or limited liability company that at the
time of the purchase, exchange, refund, or return, is not signed by
the cardholder, because the cardholder or debit cardholder used a
personal identification number to complete the transaction.

(b) This section shall apply only to receipts that include a credit
or debit card account number that are electronically printed and
shall not apply to transactions in which the sole means of recording
the person’s credit or debit card account number is by handwriting
or by an imprint or copy of the credit or debit card.

(c) This section shall not apply to documents, other than the
receipts described in paragraphs (1) to (3), inclusive, of subdivision
(a), used for internal administrative purposes.

(d) Paragraphs (2) and (3) of subdivision (a) shall become
operative on January 1, 2009.

SEC. 5.  

Section 1748.30 of the Civil Code is amended to read:

1748.30.  

For purposes of this title, the following definitions
shall apply:

(a) “Accepted debit card” means any debit card which the debit
cardholder has requested and received or has signed, or has used,
or has authorized another person to use, for the purpose of
obtaining money, property, labor, or services. Any debit card issued
in renewal of, or in substitution for, an accepted debit card becomes
an accepted debit card when received by the debit cardholder,
whether the debit card is issued by the same or by a successor card
issuer.

(b) “Account” means a demand deposit (checking), savings, or
other consumer asset account, other than an occasional or incidental
credit balance in a credit plan, established primarily for personal,
family, or household purposes.

(c) “Adequate notice” has the same meaning as found in
subdivision (o) of Section 1747.02.

(d) “Debit card” means an accepted debit card or other means
of access to a debit cardholder’s account that may be used to initiate
electronic funds transfers and may be used without unique
identifying information such as a personal identification number
to initiate access to the debit cardholder’s account.

(e) “Debit card issuer” means any person who issues a debit
card or the agent of that person for that purpose.

(f) “Debit cardholder” means a natural person to whom a debit
card is issued.

(g) “Unauthorized use” means the use of a debit card by a
person, other than the debit cardholder, to initiate an electronic
fund transfer from the debit cardholder’s account without actual
authority to initiate the transfer and from which the debit cardholder
receives no benefit. The term does not include an electronic fund
transfer initiated in any of the following manners:

(1) By a person who was furnished the debit card to the debit
cardholder’s account by the debit cardholder, unless the debit
cardholder has notified the debit card issuer that transfers by that
person are no longer authorized.

(2) With fraudulent intent by the debit cardholder or any person
acting in concert with the debit cardholder.

(3) By the debit card issuer or its employee.

SEC. 6.  

Section 99030 of the Education Code is amended to
read:

99030.  

The Regents of the University of California and the
governing body of each accredited private or independent college
or university in the state are requested to, and the Trustees of the
California State University and the Board of Governors of the
California Community Colleges shall, adopt policies to regulate
the marketing practices used on campuses by credit card
companies. In adopting the policies, it is the intent of the
Legislature that those entities consider including all of the
following requirements:

(a) That sites at which student credit cards are marketed be
registered with the campus administration and that consideration
be given to limiting the number of sites allowed on a campus.

(b) That marketers of student credit cards be prohibited from
offering gifts to students for filling out credit card applications.

(c) That credit card and debt education and counseling sessions
become a regular part of campus orientation of new students. For
purposes of this section, colleges and universities shall utilize
existing debt education materials prepared by nonprofit entities
and thus not incur the expense of preparing new materials.

(d) For the purposes of this chapter, “student credit card” has
the meaning set forth in subdivision (q) of Section 1747.02 of the
Civil Code.