Amended in Senate May 24, 2013

Amended in Senate April 1, 2013

Senate BillNo. 383


Introduced by Senator Jackson

February 20, 2013


An act to amend Sections 1747.02 and 1747.08 of the Civil Code, relating to credit cards.

LEGISLATIVE COUNSEL’S DIGEST

SB 383, as amended, Jackson. Credit cards:begin delete downloadable products:end delete personal information.

begin delete

The

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begin insertExisting state and federal law regulates the provision of credit and the use of credit cards. Theend insert Song-Beverly Credit Card Act of 1971 generally regulates credit card transactions and prohibits a person or entity that accepts credit cards for the transaction of business from requesting, or requiring as a condition to accepting the credit card, that the cardholder write any personal identification information, as defined, upon the credit card transaction form or otherwise. Existing law prohibits a person or entity that accepts credit cards for the transaction of business from requesting, or requiring as a condition to accepting the credit card, that the cardholder provide his or her personal identification information to the person or entity to be written or caused to be written upon the credit card transaction form or otherwise. Notwithstanding those provisions, existing law authorizes a person or entity that accepts credit cards for the transaction of business to require the cardholder, as a condition to accepting the credit card, to provide reasonable forms of positive identification, which may include a driver’s license or a California state identification card, provided that the information is not written or recorded on the credit card transaction form or otherwise. Existing law authorizes the use of ZIP Code information in a sales transaction at a retail motor fuel dispenser or retail motor fuel payment island with an automated cashier that uses the ZIP Code information solely for prevention of fraud, theft, or identity theft.

This bill would authorize a person or entity that accepts credit cards in an onlinebegin delete transaction involving an electronically downloadable product,end deletebegin insert transaction,end insert as defined, to require a cardholder, as a condition to accepting a credit card as payment in full or in part for goods or services, to provide the billing ZIP Code and street address number associated with the credit card, if used solely for the prevention of fraud, theft, or identity theft.begin insert The bill would authorize the person or entity accepting the credit card to require a cardholder, as a condition to accepting a credit card as payment in full or in part, in an online transaction, to provide additional personal information, ifend insertbegin insert it requires that information for the prevention of fraud, theft, or identity theft, and the additional personal information is used solely for the prevention of fraud, theft, or identity theft. end insert The bill would require that person or entity to destroy or dispose of the ZIPbegin delete Code andend deletebegin insert Code,end insert street addressbegin delete numberend deletebegin insert number, and any additional personalend insert informationbegin insert it requiresend insert in a secure manner after it is no longer needed for the prevention of fraud, theft, or identity theft. The bill would further prohibit that person or entity from aggregating the ZIPbegin delete Code andend deletebegin insert Code,end insert street addressbegin delete numberend deletebegin insert number, or additional personal end insert informationbegin insert it requiresend insert with any other personal identification information, as defined, and from sharing the ZIPbegin delete Code andend deletebegin insert Code,end insert street addressbegin delete numberend deletebegin insert number, or additional personalend insert informationbegin insert it requiresend insert with any other person or entity.

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

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

P2    1

SECTION 1.  

(a) The Legislature finds and declares all of the
2following:

3(1) The Song-Beverly Credit Card Act of 1971 establishes
4privacy and other protections for cardholders. These protections
5prohibit a person, firm, partnership, association, or corporation
6from requesting or requiring a cardholder to provide personal
7 identification information in a credit card transaction, with
8specified, limited exceptions.

P3    1(2) The Song-Beverly Credit Card Act of 1971 applies to credit
2card transactions without reference to the method, platform, or
3technology used to process or to complete the transaction.

4(3) The California Supreme Court, in Apple Inc. v. Superior
5Court (2013) 56 Cal.4th 128, declared the Song-Beverly Credit
6Card Act of 1971 not applicable to an online transaction involving
7a downloadable product. As a result, the privacy protections of the
8act do not apply to those transactions.

9(b) It is the intent of the Legislature to apply the provisions of
10the Song-Beverly Credit Card Act of 1971 to allbegin insert onlineend insert credit card
11transactions, including online transactions involving a
12downloadable product.

13

SEC. 2.  

Section 1747.02 of the Civil Code is amended to read:

14

1747.02.  

As used in this title:

15(a) “Credit card” means any card, plate, coupon book, or other
16single credit device existing for the purpose of being used from
17time to time upon presentation to obtain money, property, labor,
18or services on credit. “Credit card” does not mean any of the
19following:

20(1) Any single credit device used to obtain telephone property,
21labor, or services in any transaction under public utility tariffs.

22(2) Any device that may be used to obtain credit pursuant to an
23electronic fund transfer, but only if the credit is obtained under an
24agreement between a consumer and a financial institution to extend
25credit when the consumer’s asset account is overdrawn or to
26maintain a specified minimum balance in the consumer’s asset
27account.

28(3) Any key or card key used at an automated dispensing outlet
29to obtain or purchase petroleum products, as defined in subdivision
30(c) of Section 13401 of the Business and Professions Code, that
31will be used primarily for business rather than personal or family
32purposes.

33(b) “Accepted credit card” means any credit card that the
34cardholder has requested or applied for and received or has signed,
35or has used, or has authorized another person to use, for the purpose
36of obtaining money, property, labor, or services on credit. Any
37credit card issued in renewal of, or in substitution for, an accepted
38credit card becomes an accepted credit card when received by the
39cardholder, whether the credit card is issued by the same or a
40successor card issuer.

P4    1(c) “Card issuer” means any person who issues a credit card or
2the agent of that person for that purpose with respect to the credit
3card.

4(d) “Cardholder” means a natural person to whom a credit card
5is issued for consumer credit purposes, or a natural person who
6has agreed with the card issuer to pay consumer credit obligations
7arising from the issuance of a credit card to another natural person.
8For purposes of Sections 1747.05, 1747.10, and 1747.20, the term
9includes any person to whom a credit card is issued for any
10purpose, including business, commercial, or agricultural use, or a
11person who has agreed with the card issuer to pay obligations
12arising from the issuance of that credit card to another person.

13(e) “Retailer” means every person other than a card issuer who
14furnishes money, goods, services, or anything else of value upon
15presentation of a credit card by a cardholder. “Retailer” shall not
16mean the state, a county, city, city and county, or any other public
17agency.

18(f) “Unauthorized use” means the use of a credit card by a
19person, other than the cardholder, (1) who does not have actual,
20implied, or apparent authority for that use and (2) from which the
21cardholder receives no benefit. “Unauthorized use” does not include
22the use of a credit card by a person who has been given authority
23by the cardholder to use the credit card. Any attempted termination
24by the cardholder of the person’s authority is ineffective as against
25the card issuer until the cardholder complies with the procedures
26required by the card issuer to terminate that authority.
27Notwithstanding the above, following the card issuer’s receipt of
28oral or written notice from a cardholder indicating that it wishes
29to terminate the authority of a previously authorized user of a credit
30card, the card issuer shall follow its usual procedures for precluding
31any further use of a credit card by an unauthorized person.

32(g) “Inquiry” means a writing that is posted by mail to the
33address of the card issuer to which payments are normally tendered,
34unless another address is specifically indicated on the statement
35for that purpose, then to that other address, and that is received by
36the card issuer no later than 60 days after the card issuer transmitted
37the first periodic statement that reflects the alleged billing error,
38and that does all of the following:

39(1) Sets forth sufficient information to enable the card issuer to
40identify the cardholder and the account.

P5    1(2) Sufficiently identifies the billing error.

2(3) Sets forth information providing the basis for the
3cardholder’s belief that the billing error exists.

4(h) “Response” means a writing that is responsive to an inquiry
5and mailed to the cardholder’s address last known to the card
6issuer.

7(i) “Timely response” means a response that is mailed within
8two complete billing cycles, but in no event later than 90 days,
9after the card issuer receives an inquiry.

10(j) “Billing error” means an error by omission or commission
11in (1) posting any debit or credit, or (2) in computation or similar
12error of an accounting nature contained in a statement given to the
13cardholder by the card issuer. “Billing error” does not mean any
14dispute with respect to value, quality, or quantity of goods, services,
15or other benefit obtained through use of a credit card.

16(k) “Adequate notice” means a printed notice to a cardholder
17that sets forth the pertinent facts clearly and conspicuously so that
18a person against whom it is to operate could reasonably be expected
19to have noticed it and understood its meaning.

20(l) “Secured credit card” means any credit card issued under an
21agreement or other instrument that pledges, hypothecates, or places
22a lien on real property or money or other personal property to
23secure the cardholder’s obligations to the card issuer.

24(m) “Student credit card” means any credit card that is provided
25to a student at a public or private college or university and is
26provided to that student solely based on his or her enrollment in a
27public or private university, or is provided to a student who would
28not otherwise qualify for that credit card on the basis of his or her
29income. A “student credit card” does not include a credit card
30issued to a student who has a cocardholder or cosigner who would
31otherwise qualify for a credit card other than a student credit card.

32(n) “Retail motor fuel dispenser” means a device that dispenses
33fuel that is used to power internal combustion engines, including
34motor vehicle engines, that processes the sale of fuel through a
35remote electronic payment system, and that is in a location where
36an employee or other agent of the seller is not present.

37(o) “Retail motor fuel payment island automated cashier” means
38a remote electronic payment processing station that processes the
39retail sale of fuel that is used to power internal combustion engines,
40including motor vehicle engines, that is in a location where an
P6    1employee or other agent of the seller is not present, and that is
2located in close proximity to a retail motor fuel dispenser.

3(p) “Onlinebegin delete transaction involving an electronically downloadable
4product”end delete
begin insert transactionend insertbegin insertend insert means a credit card transaction for a product,
5service, subscription, or any other consideration, in which the
6product, service, subscription, or consideration isbegin delete providedend delete
7begin insert transactedend insert by means of abegin delete download to the cardholder’send delete computer,
8telephone, or other electronic device.

9

SEC. 3.  

Section 1747.08 of the Civil Code is amended to read:

10

1747.08.  

(a) Except as provided in subdivision (c), a person,
11firm, partnership, association, or corporation that accepts credit
12cards for the transaction of businessbegin delete mayend deletebegin insert shallend insert not do any of the
13following:

14(1) Request, or require as a condition to accepting the credit
15card as payment in full or in part for goods or services, the
16cardholder to write any personal identification information upon
17the credit card transaction form or otherwise.

18(2) Request, or require as a condition to accepting the credit
19card as payment in full or in part for goods or services, the
20cardholder to provide personal identification information, which
21the person, firm, partnership, association, or corporation accepting
22the credit card writes, causes to be written, or otherwise records
23upon the credit card transaction form or otherwise.

24(3) Utilize, in any credit card transaction, a credit card form
25begin delete whichend deletebegin insert thatend insert contains preprinted spaces specifically designated for
26filling in any personal identification information of the cardholder.

27(b) For purposes of this section, “personal identification
28 information” means information concerning the cardholder, other
29than information set forth on the credit card, and including, but
30not limited to, the cardholder’s address and telephone number.

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

32(1) If the credit card is being used as a deposit to secure payment
33in the event of default, loss, damage, or other similar occurrence.

34(2) Cash advance transactions.

35(3) If any of the following applies:

36(A) The person, firm, partnership, association, or corporation
37accepting the credit card is contractually obligated to provide
38personal identification information in order to complete the credit
39card transaction.

P7    1(B) The person, firm, partnership, association, or corporation
2accepting the credit card in a sales transaction at a retail motor fuel
3dispenser or retail motor fuel payment island automated cashier
4uses the ZIP Code information solely for prevention of fraud, theft,
5or identity theft.

6(C) The person, firm, partnership, association, or corporation
7accepting the credit card is obligated to collect and record the
8personal identification information by federal or state law or
9regulation.

10(4) If personal identification information is required for a special
11purpose incidental but related to the individual credit card
12transaction, including, but not limited to, information relating to
13shipping, delivery, servicing, or installation of the purchased
14merchandise, or for special orders.

15(d) (1) This section does not prohibit any person, firm,
16partnership, association, or corporation from requiring the
17cardholder, as a condition to accepting the credit card as payment
18in full or in part for goods or services, to provide reasonable forms
19of positive identification, which may include a driver’s license or
20a California state identification card, or where one of these is not
21available, another form of photo identification, provided that none
22of the information contained thereon is written or recorded on the
23credit card transaction form or otherwise. If the cardholder pays
24for the transaction with a credit card number and does not make
25the credit card available upon request to verify the number, the
26cardholder’s driver’s license number or identification card number
27may be recorded on the credit card transaction form or otherwise.

28(2) Notwithstanding subdivision (a), a person, firm, partnership,
29association, or corporation accepting the credit card may require
30a cardholder, as a condition to accepting a credit card as payment
31in full or in part in an onlinebegin delete transaction involving an electronically
32downloadable product,end delete
begin insert transaction,end insert to provide the billing ZIP Code
33number and numerical portion of the street address associated with
34the credit card, if used solely for the prevention of fraud, theft, or
35identity theft.begin insert The person, firm, partnership, association, or
36corporation accepting the credit card may require a cardholder,
37as a condition to accepting a credit card as payment in full or in
38part, in an online transaction, to provide additional personal
39information, if end insert
begin insertit requires that information for the prevention of
40fraud, theft, or identity theft, and the additional personal
P8    1information is used solely for the prevention of fraud, theft, or
2identity theft.end insert
The person, firm, partnership, association, or
3corporation accepting the credit card shall destroy or dispose of
4the ZIPbegin delete Code andend deletebegin insert Code,end insert street addressbegin delete numberend deletebegin insert number, and any
5additional personalend insert
informationbegin insert it requires pursuant to this
6subdivisionend insert
in a secure manner after it is no longer needed for the
7prevention of fraud, theft, or identity theft. The person, firm,
8partnership, association, or corporation accepting the credit card
9begin delete mayend deletebegin insert shallend insert not aggregate the ZIPbegin delete Code andend deletebegin insert Code,end insert street address
10begin delete numberend deletebegin insert number, or additional personalend insert informationbegin insert it requires
11pursuant to this subdivisionend insert
with any other personal identification
12information andbegin delete mayend deletebegin insert shallend insert not share the ZIPbegin delete Code andend deletebegin insert Code,end insert street
13addressbegin delete numberend deletebegin insert number, or additional personalend insert informationbegin insert it
14requires pursuant to this subdivisionend insert
with any other person, firm,
15partnership, association, or corporation.

16(e) Any person who violates this section shall be subject to a
17civil penalty not to exceed two hundred fifty dollars ($250) for the
18first violation and one thousand dollars ($1,000) for each
19subsequent violation, to be assessed and collected in a civil action
20brought by the person paying with a credit card, by the Attorney
21General, or by the district attorney or city attorney of the county
22or city in which the violation occurred. However, no civil penalty
23shall be assessed for a violation of this section if the defendant
24shows by a preponderance of the evidence that the violation was
25not intentional and resulted from a bona fide error made
26notwithstanding the defendant’s maintenance of procedures
27reasonably adopted to avoid that error. When collected, the civil
28penalty shall be payable, as appropriate, to the person paying with
29a credit card who brought the action, or to the general fund of
30whichever governmental entity brought the action to assess the
31civil penalty.

32(f) The Attorney General, or any district attorney or city attorney
33within his or her respective jurisdiction, may bring an action in
34the superior court in the name of the people of the State of
35California to enjoin violation of subdivision (a) and, upon notice
36to the defendant of not less than five days, to temporarily restrain
37and enjoin the violation. If it appears to the satisfaction of the court
38that the defendant has, in fact, violated subdivision (a), the court
39may issue an injunction restraining further violations, without
40requiring proof that any person has been damaged by the violation.
P9    1In these proceedings, if the court finds that the defendant has
2violated subdivision (a), the court may direct the defendant to pay
3any or all costs incurred by the Attorney General, district attorney,
4or city attorney in seeking or obtaining injunctive relief pursuant
5to this subdivision.

6(g) Actions for collection of civil penalties under subdivision
7(e) and for injunctive relief under subdivision (f) may be
8consolidated.

9(h) The changes made to this section by Chapter 458 of the
10Statutes of 1995 apply only to credit card transactions entered into
11on and after January 1, 1996. Nothing in those changes shall be
12construed to affect any civil actionbegin delete whichend deletebegin insert thatend insert was filed before
13January 1, 1996.



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