Provides that use of a credit card account number or debit card account number shall be considered theft of property where such use is for an unlawful purpose

Summary of specific provisions

Section I of the bill amends section 155.30 of the penal law to add a new subdivision 4-a including the theft of credit card account numbers and debit card account numbers within the definition of Grand Larceny in the Fourth Degree, a Class E felony, when the person stealing the account numbers intends to use the numbers unlawfully or knows that another person intends to use the numbers unlawfully.

Section 2 of the bill makes the effective date of this new provision November 1 next succeeding the date on which it shall have become law.

Justification

At present, it is an E felony to steal property consist- ing of a credit card or debit card. (Penal Law Section 155.30(4)). But if a thief steals a credit card account number or a debit card account number instead of the actual, physical credit card, no crime has been committed until the thief actually uses the account number and obtains goods, money or services. Years ago, someone who wanted access to a person's credit or debit account would have to physically possess that person's credit or debit card. Today, an account number is all that a thief needs and increasingly, account numbers are what thieves are stealing. Stolen account numbers can be used on the internet and by phone to access a bank or credit account or to order merchandise or services. These account numbers can also easily be encoded onto plastics to create fraudulent ATM or credit cards. Unfortunately, New York law has not been changed to recognize this important trend in criminal activity.

Credit or debit card account numbers can be stolen in a variety of ways. One method, is by having employees at hotels, restaurants or other establishments use a skimmer or other device to capture the account information at the time the customer uses his or her card to pay a bill.

Law enforcement officials have also seen account numbers taken by sales employees who take home copies of customers' sales receipts, by individ- uals who steal mail or garbage from outside people's homes, by thieves who hack into computer records of banks or businesses, and by persons who accept credit card information for purchases or donations over the phone. Account numbers are also obtained by phishing - sending fraudu- lent e-mails purporting to be from legitimate companies that ask for credit card information to be updated or amended or re-entered by the customer in order to maintain the business relationship. Once the thief possesses the account number, he can either use it himself to empty the credit or bank account of the victim or sell it to a third party who intends to use the number to obtain goods, money or services.

Because there can be legitimate reasons why one person possesses anoth- er's account number, the proposal is drafted narrowly to provide that a crime is committed under this proposed legislation only when a person steals an account number with the intent to use it unlawfully or with knowledge that another intends to use it unlawfully.

Recent legislation has begun to recognize the new ways in which identity theft is being committed. New crimes of identity theft and unlawful possession of personal identifying information have been created. The criminal procedure law has been amended to allow victims whose credit card account numbers have been stolen to submit affidavits for the grand jury rather than appear in person to put them on the same footing as victims whose physical credit cards have been stolen. The proposed

legislation is yet another needed step to bring New York law up to date and offer increased protection to victims of identity theft.

Prior legislative history

2007-2008: A.67 - Referred to Codes. 2005-2006: A.11444 - Referred to Codes.

Fiscal implications

None.

Effective date

November 15t after enactment.