Bill S760-2013

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.

Details

Actions

  • Jun 21, 2013: COMMITTED TO RULES
  • 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

Votes

VOTE: COMMITTEE VOTE: - Consumer Protection - Feb 27, 2013
Ayes (11): Zeldin, Boyle, Fuschillo, Little, Marchione, Maziarz, Savino, Hoylman, Serrano, Gipson, Latimer

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.


Text

STATE OF NEW YORK ________________________________________________________________________ 760 2013-2014 Regular Sessions IN 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.

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