BILL ANALYSIS Ó
AB 2307
Page 1
Date of Hearing: April 5, 2016
ASSEMBLY COMMITTEE ON PRIVACY AND CONSUMER PROTECTION
Ed Chau, Chair
AB 2307
(Chau) - As Introduced February 18, 2016
SUBJECT: Weights and measures: service agencies and service
agents: reporting fraud
SUMMARY: Protects consumers from credit card fraud and identity
theft at gas stations by requiring service agents who repair
gasoline pumps to report to the county sealer any credit card
skimming devices found in the course of their repair work.
Specifically, this bill:
1)Requires a service agency or service agent to report to the
county sealer if a measuring device has been altered in such a
way as to facilitate fraud.
2)Requires that if a service agency or service agent has
possession of the device used to alter the measuring device,
then the service agency or service agent must surrender the
device to the county sealer or local law enforcement within 24
hours of discovering that the measuring device has been
altered.
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EXISTING LAW:
1)Establishes the office of the county sealer in the 58 counties
and authorizes the sealer to prosecute violations of laws
relating to weights and measures. (Business and Professions
Code (BPC) Section 12013, 12015, and 12200, et seq.)
2)Specifies that service agents, who act as agents of county
sealers, must be registered by the Secretary of Food and
Agriculture. (BPC 12532(a))
3)Specifies that a device may only be placed into service by a
county sealer or a service agent. (BPC 12532(d))
4)Specifies that a person who repairs a device is not required
to be registered with the Secretary of Food and Agriculture as
long as the device is placed into service following a repair
by a sealer or registered service agent or registered service
agency. (BPC 12532(e))
FISCAL EFFECT: Unknown
COMMENTS:
1)Purpose of this bill . This bill is intended to help prevent
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credit card fraud and identity theft by requiring service
agents who repair gas pumps to report and turn over credit
card skimming devices within 24 hours to their county sealer,
or law enforcement. This measure is sponsored by the
California Agricultural Commissioners and Sealers Association.
2)Author's statement . According to the author's office, "Across
the country, criminal organizations are using skimmer devices
to steal money from unsuspecting victims using gas pumps,
ATMs, or other credit card vending machines. In 2015, there
was an inspection conducted at 33 gas stations in Los Angeles
and Ventura Counties, by personnel from the Los Angeles County
Agricultural Commissioner's office, numerous federal and local
law enforcement agencies, an energy corporation, and a
financial services corporation, which found ten credit card
skimmers located at eight gas stations.
"Unfortunately, there is no uniform process for dealing with
these devices when they are discovered by a service agent in
California. Reports from county sealers throughout California
indicate that service agents often dispose skimmers into the
garbage or hand them over to gas station attendants instead of
reporting the problem."
3)The prevalence of credit card skimmers. Organized crime rings
have begun using credit card skimmers to steal money from
unsuspecting victims at gas pumps, ATMs, and credit card
vending machines. In 2015, the Los Angeles County
Agricultural Commissioner's office, along with federal and
local law enforcement agencies, conducted inspections of 33
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gas stations in Los Angeles and Ventura Counties and found ten
credit card skimmers located at eight different gas stations.
Modern credit card skimmers are outfitted with Bluetooth
devices that can instantly transmit credit card data,
including PIN numbers and security codes, to a nearby mobile
device or laptop. Once thieves receive the credit card data
they can immediately begin making fraudulent charges using the
card. Most people do not discover the fraud until their next
bank or credit card statement, which makes it difficult, if
not impossible, to narrow down where and when the credit card
data was stolen.
Other states hit hard by this growing criminal activity
include Illinois, Indiana, Kentucky, Ohio, Michigan, and
Wisconsin.
4)Self-service gas pumps using non-chip credit card technology
are particularly risky. Unlike retails stores which typically
have cashiers at point-of-sale who can readily monitor the
security of the cash registers and credit card swiping
machines, gas stations typically have self-service pumps. The
cashiers who work inside of gas station convenience stores
simply cannot easily monitor gas pumps throughout the day to
prevent tampering by criminals. Gas pumps are also an easy
target for criminals because the oil industry received a
two-year extension to October 2017 to comply with new federal
regulations that began requiring all other retailers to
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install chip enabled credit card machines by October 2015.
5)The role of county sealers and service agents . County sealers
of weights and measures are responsible for ensuring all
commercial scaling and volumetric measuring devices are
providing accurate readings, so customers pay the appropriate
amount for the product they are purchasing. One of the most
common devices sealers test annually is gas station pumps. If
the county sealer determines that a gas pump is not providing
an accurate reading, then it is removed from operation until
an authorized service agent can repair the pump. According to
the California Agricultural Commissioners and Sealers
Association, service agents have been encountering a growing
number of credit card skimmers in the course of repairing gas
pumps.
This bill requires all service agents who work on gas pump
meters to confiscate and turn in credit card skimmers when
they discover them inside gas pumps. Reports from county
sealers indicate that some service agents dispose of skimmers
or hand them over to gas station attendants instead of
reporting the problem. This bill requires all service agents
to report potential credit card skimming and turn in all
evidence within 24 hours to their county sealer, who can then
contact the appropriate law enforcement authorities.
6)Author's amendments. The author has agreed to accept the
below amendments to clarify the language of the bill and to
require county sealers to coordinate with the appropriate law
enforcement authorities as needed in investigating and
prosecuting criminal activities.
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On page 2, line 1, after "SECTION 1" add:
Section 12215 shall be added to the Business and Professions
Code to read:
12215. A sealer who receives information or evidence indicating
that any weighing or measuring device, parking meter, or other
installation under the jurisdiction of the sealer has been
altered in such a way as to facilitate any type of fraud, shall
coordinate with the appropriate law enforcement authorities as
needed in investigating and prosecuting fraudulent activity.
SECTION 2.
On page 3, lines 4-9, revise the bill language as follows:
(i) If a device has been altered in such a way as to
facilitate fraud, a service agency or service agent shall
report it to the county sealer within 24 hours of
discovering that the device has been altered . If the
service agency or service agent has possession of the
device or any mechanism, component, software or device
found attached thereto or used in conjunction with the
device that serves to facilitate fraud , the service agency
or service agent shall surrender the device or any such
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mechanism, component, software or attachment to the county
sealer or local law enforcement within 24 hours of
discovering that the device has been altered.
7)Arguments in support . According to the California
Agricultural Commissioners and Sealers Association, "Skimming
technology is always improving and may be difficult to detect
to the untrained eye. Skimmers are sometimes installed
outside an ATM or pump and frequently hidden within the
machine. Often times, the devices are discovered by
registered service agents during the course of responding to
calls for repair. AB 2307 will establish a uniform reporting
protocol for service agents alerted to the presence of a
credit card skimming device or who discover a suspicious
device during the course of a repair of a weighing and
measuring device."
REGISTERED SUPPORT / OPPOSITION:
Support
California Agricultural Commissioners and Sealers Association
(sponsor)
Opposition
None on file.
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Analysis Prepared by:Jennie Bretschneider / P. & C.P. / (916)
319-2200