Relates to the personal information of a credit or debit card holder

2 Co-sponsors

• Liz Krueger
• Kevin S. Parker

BILL NUMBER:S1420B

Title of bill

An act to amend the general business law, in relation to the personal information of a credit or debit card holder

Purpose

To protect consumers by prohibiting businesses from requiting personal identification information to complete credit or debit card transactions unless required by the credit or debit card issuer.

Summary of provisions

Amends subdivision 3 of section 520-a of the general business law, as amended by chapter 233 of the laws of 2007, to require that businesses accepting credit or debit cards may not require the credit or debit card holder to write or otherwise electronically enter any personal identification information, unless such information is solely for the detection, investigation or prevention of fraud, theft, identity theft, criminal activity or the enforcement of terms of sale. Such personal identification information includes but it not limited to address, zip code, email address, and telephone numbers (home, cell, and work).

Existing law

Current law prohibits retailers and businesses from requesting personal information to complete a credit or debit card transaction. However, personal information is loosely defined as address only. Additionally, the current law does not prohibit businesses from collecting electronically entered personal information.

Justification

At present, many businesses in New York and other states across the country require personal information, such as a zip code, when consumers complete credit or debit card transactions, despite the fact that such information is unnecessary when completing an in-person transaction. Such personal information can then be used in customized computer software to perform reverse searches from databases that contain millions of names, e-mail addresses, telephone numbers, and street addresses that are indexed in a manner resembling a reverse phonebook. The software can then match a person's name and zip code with their previously undisclosed address, giving the business the ability to market products to customers and to sell this information to other businesses.

In February 2011, the Supreme Court of California held in Pineda v. Williams-Sonoma Stores, Inc. that "personal identification information,"as the term is used in their state Credit Card Act, includes a cardholder's zip code and that requesting and recording such information violates the Credit Card Act As such, businesses in California can no longer require zip codes to complete credit transactions unless required by the credit or debit card issuer. A similar law suit was filed in Massachusetts in May 2011.

The language in the California Credit Card Act is nearly identical to the language used in subdivision 3 of section 520-a of the general business law in New York. By further defining what constitutes "personal identification information," consumer interests in New York can be protected. Additionally, by prohibiting such information from being entered electronically, the statute becomes current with the technological advances made since the statute was originally passed in 1987.

Legislative history

2011-2012: A.9048- Referred to Consumer Protection/ S.6041- Referred to Rules

Fiscal implications

None.

Effective date

This act shall take effect on the ninetieth day after it shall have become a law.