S760-2013 - NY Senate Open Legislation - Prohibits issuers of credit cards and debit cards from knowingly accepting or soliciting financial information of a cardholder from a third-party

Establishes issuers of credit cards and debit cards are prohibited from knowingly accepting or soliciting personal financial information of a cardholder from a third-party; establishes a civil penalty not to exceed two thousand dollars for each violation of this section.

Sponsor: FUSCHILLO / Co-sponsor(s): KRUEGER, MAZIARZ, RANZENHOFER, SAVINO, STAVISKY, ZELDIN
Law Section: General Business Law / Law: Add S518-b, Gen Bus L

S760-2013 Actions

Mar 4, 2013: ADVANCED TO THIRD READING
Feb 28, 2013: 2ND REPORT CAL.
Feb 27, 2013: 1ST REPORT CAL.105
Jan 9, 2013: REFERRED TO CONSUMER PROTECTION

S760-2013 Meetings

Consumer Protection: Feb 27, 2013

S760-2013 Calendars

S760-2013 Votes

VOTE: COMMITTEE VOTE: - Consumer Protection - Feb 27, 2013

Ayes (11): Zeldin, Boyle, Fuschillo, Little, Marchione, Maziarz, Savino, Hoylman, Serrano, Gipson, Latimer

S760-2013 Memo

BILL NUMBER:S760

TITLE OF BILL:
An act to amend the general business law, in relation to prohibiting
issuers from accepting personal financial information of holders from a
third-party

PURPOSE:
This bill would prohibit card issuers from
knowingly accepting or soliciting personal financial information about a
cardholder from a person other than the card holder.

SUMMARY OF PROVISIONS:
This bill would add a new
Section 518-b to the General Business Law, which would prohibit issuers
of credit cards and debit cards from knowingly accepting or soliciting
the personal information of a holder from a person other than the card
holder. A violation of these provisions would be punishable by a civil
penalty not to exceed two thousand dollars for each such violation.

JUSTIFICATION:
Third-parties should not be permitted
to give personal information about a credit or debit cardholder to the
issuer of the card. The cardholder is ultimately responsible for the use
of the card, and their credit history is effected by any use of or
changes to the account. Any errors in the information provided by a
third-party might be recorded on a consumer credit report, where even
providing a different street address can affect a consumer's credit
history. Also, if a third-party were permitted to give the address of
the cardholder to the issuer, they might be able to divert monthly
statements to another address or raise the limit of the line of credit
attached to the card. Likewise, in the case of a divorced spouse or when
a child is a third-party user of their parent's card, such a user might
be able to cause harm to the cardholder or the cardholder's credit by
Riving inaccurate or misleading information to the issuer.

In recognition of the fact that the cardholder is ultimately responsible
for the use of their card, this legislation would make them the sole
source of personal information about themselves. At the seine time, this
bill would not limit the transmittal of financial or transaction
information by merchants or businesses, in recognition of the fact that
the transmittal of these types of information is necessary for the use
of credit and debit cards.

LEGISLATIVE HISTORY:
2011-2012: Consumer Protection Committee (S.5061)
2007-2008: Consumer Protection Committee (S.4308/A/6852)
2005-2006: Consumer Protection Committee (S.4687/A.9321)

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
On the first of September next
succeeding the date on which it shall have become a law.

S760-2013 Text

 S T A T E   O F   N E W   Y O R K
 
                                           760
 2013-2014 Regular Sessions
 I N  SENATE
 (PREFILED)
 January 9, 2013
 
 Introduced  by  Sens.  FUSCHILLO, MAZIARZ, RANZENHOFER -- read twice and
 ordered printed, and when printed to be committed to the Committee  on
 Consumer Protection
 AN  ACT  to  amend  the general business law, in relation to prohibiting
 issuers from accepting personal financial information of holders  from
 a third-party
 

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section 1. The general business law is amended by adding a new section
 518-b to read as follows:

 

S 518-B. PROHIBITED CREDIT CARD USER INFORMATION REQUESTS. 1.  ISSUERS
 OF  CREDIT CARDS AND DEBIT CARDS ARE PROHIBITED FROM KNOWINGLY ACCEPTING
 OR SOLICITING THE PERSONAL FINANCIAL INFORMATION  OF  A  HOLDER  FROM  A
 THIRD-PARTY.  PROVIDED, HOWEVER, THAT NO PROVISION OF THIS SECTION SHALL
 BE DEEMED TO PROHIBIT AN ISSUER OF A CREDIT  CARD  OR  DEBIT  CARD  FROM
 ACCEPTING  OR  SOLICITING  FROM  A  BANKING  ORGANIZATION, AS DEFINED IN
 SECTION TWO OF THE BANKING LAW, THE PERSONAL INFORMATION OF A HOLDER FOR
 THE PURPOSE OF VERIFYING THE IDENTITY OF SUCH HOLDER AND PREVENT IMPROP
 ER OR UNAUTHORIZED USE.
 2. A VIOLATION OF THE PROVISIONS OF THIS SECTION BY AN ISSUER SHALL BE
 PUNISHABLE BY A CIVIL PENALTY NOT TO EXCEED  TWO  THOUSAND  DOLLARS  FOR
 EACH SUCH VIOLATION.
 

S  2.  This  act  shall  take  effect  on  the first of September next
 succeeding the date on which it shall have become a law.
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD01400-01-3

S760-2013: Prohibits issuers of credit cards and debit cards from knowingly accepting or soliciting financial information of a cardholder from a third-party