BILL NUMBER: SB 383 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 24, 2013
AMENDED IN SENATE APRIL 1, 2013
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: downloadable
products: personal information.
The
Existing state and federal law regulates the provision of
credit and the use of credit cards. The 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 online transaction involving an electronically
downloadable product, transaction, 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. 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, if
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.
The bill would require that person or entity to destroy or dispose of
the ZIP Code and Code, street address
number number, and any additional personal
information it requires 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 ZIP Code and Code,
street address number number, or additional
personal information it requires with any other
personal identification information, as defined, and from sharing the
ZIP Code and Code, street address
number number, or additional personal
information it requires 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:
SECTION 1. (a) The Legislature finds and declares all of the
following:
(1) The Song-Beverly Credit Card Act of 1971 establishes privacy
and other protections for cardholders. These protections prohibit a
person, firm, partnership, association, or corporation from
requesting or requiring a cardholder to provide personal
identification information in a credit card transaction, with
specified, limited exceptions.
(2) The Song-Beverly Credit Card Act of 1971 applies to credit
card transactions without reference to the method, platform, or
technology used to process or to complete the transaction.
(3) The California Supreme Court, in Apple Inc. v. Superior Court
(2013) 56 Cal.4th 128, declared the Song-Beverly Credit Card Act of
1971 not applicable to an online transaction involving a downloadable
product. As a result, the privacy protections of the act do not
apply to those transactions.
(b) It is the intent of the Legislature to apply the provisions of
the Song-Beverly Credit Card Act of 1971 to all online
credit card transactions, including online transactions involving a
downloadable product.
SEC. 2. 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 upon presentation 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) "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.
(d) "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.
(e) "Retailer" means every person other than a card issuer who
furnishes money, goods, services, or anything else of value upon
presentation of a credit card by a cardholder. "Retailer" shall not
mean the state, a county, city, city and county, or any other public
agency.
(f) "Unauthorized use" means the use of a credit card by a person,
other than the cardholder, (1) who does not have actual, implied, or
apparent authority for that use and (2) from which the cardholder
receives no benefit. "Unauthorized use" does not include the use of a
credit card by a person who has been given authority by the
cardholder to use the credit card. Any attempted termination by the
cardholder of the person's authority is ineffective as against the
card issuer until the cardholder complies with the procedures
required by the card issuer to terminate that authority.
Notwithstanding the above, following the card issuer's receipt of
oral or written notice from a cardholder indicating that it wishes to
terminate the authority of a previously authorized user of a credit
card, the card issuer shall follow its usual procedures for
precluding any further use of a credit card by an unauthorized
person.
(g) "Inquiry" means a writing that is posted by mail to the
address of the 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 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 to
identify the cardholder and the account.
(2) Sufficiently identifies the billing error.
(3) Sets forth information providing the basis for the cardholder'
s belief that the billing error exists.
(h) "Response" means a writing that is responsive to an inquiry
and mailed to the cardholder's address last known to the card issuer.
(i) "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 receives an inquiry.
(j) "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 by the card issuer. "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.
(k) "Adequate notice" means a printed notice to a 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.
( l ) "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.
(m) "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.
(n) "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.
(o) "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.
(p) "Online transaction involving an electronically
downloadable product" transaction "
means a credit card transaction for a product, service, subscription,
or any other consideration, in which the product, service,
subscription, or consideration is provided
transacted by means of a download to the cardholder's
computer, telephone, or other electronic device.
SEC. 3. Section 1747.08 of the Civil Code is amended to read:
1747.08. (a) Except as provided in subdivision (c), a person,
firm, partnership, association, or corporation that accepts credit
cards for the transaction of business may
shall not do any of the following:
(1) Request, or require as a condition to accepting the credit
card as payment in full or in part for goods or services, the
cardholder to write any personal identification information upon the
credit card transaction form or otherwise.
(2) Request, or require as a condition to accepting the credit
card as payment in full or in part for goods or services, the
cardholder to provide personal identification information, which the
person, firm, partnership, association, or corporation accepting the
credit card writes, causes to be written, or otherwise records upon
the credit card transaction form or otherwise.
(3) Utilize, in any credit card transaction, a credit card form
which that contains preprinted spaces
specifically designated for filling in any personal identification
information of the cardholder.
(b) For purposes of this section, "personal identification
information" means information concerning the cardholder, other than
information set forth on the credit card, and including, but not
limited to, the cardholder's address and telephone number.
(c) Subdivision (a) does not apply in the following instances:
(1) If the credit 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 is contractually obligated to provide
personal identification information in order to complete the credit
card transaction.
(B) The person, firm, partnership, association, or corporation
accepting the credit 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 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
transaction, including, but not limited to, information relating to
shipping, delivery, servicing, or installation of the purchased
merchandise, or for special orders.
(d) (1) This section does not prohibit any person, firm,
partnership, association, or corporation from requiring the
cardholder, as a condition to accepting the credit 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 written or recorded on the
credit card transaction form or otherwise. If the cardholder pays for
the transaction with a credit card number and does not make the
credit card available upon request to verify the number, the
cardholder's driver's license number or identification card number
may be recorded on the credit card transaction form or otherwise.
(2) Notwithstanding subdivision (a), a person, firm, partnership,
association, or corporation accepting the credit card may require a
cardholder, as a condition to accepting a credit card as payment in
full or in part in an online transaction involving an
electronically downloadable product, transaction,
to provide the billing ZIP Code number and numerical portion of
the street address associated with the credit card, if used solely
for the prevention of fraud, theft, or identity theft. The
person, firm, partnership, association, or corporation accepting the
credit card may 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, if 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. The person,
firm, partnership, association, or corporation accepting the credit
card shall destroy or dispose of the ZIP Code and
Code, street address number
number, and any additional personal information it
requires pursuant to this subdivision in a secure manner after
it is no longer needed for the prevention of fraud, theft, or
identity theft. The person, firm, partnership, association, or
corporation accepting the credit card may
shall not aggregate the ZIP Code and
Code, street address number number, or
additional personal information it requires pursuant to
this subdivision with any other personal identification
information and may shall not share the
ZIP Code and Code, street address
number number, or additional personal
information it requires pursuant to this subdivision with
any other person, firm, partnership, association, or corporation.
(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, 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 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
that was filed before January 1, 1996.