senate Bill S4245

Imposes sanctions for credit card charge backs on motor vehicle fees

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 15 / Mar / 2013
    • REFERRED TO TRANSPORTATION
  • 16 / Apr / 2013
    • 1ST REPORT CAL.342
  • 17 / Apr / 2013
    • 2ND REPORT CAL.
  • 22 / Apr / 2013
    • ADVANCED TO THIRD READING
  • 29 / May / 2013
    • PASSED SENATE
  • 29 / May / 2013
    • DELIVERED TO ASSEMBLY
  • 29 / May / 2013
    • REFERRED TO TRANSPORTATION

Summary

Imposes sanctions for credit card charge backs on motor vehicle fees.

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Bill Details

Versions:
S4245
Legislative Cycle:
2013-2014
Current Committee:
Assembly Transportation
Law Section:
Vehicle and Traffic Law
Laws Affected:
Amd §202-b, V & T L

Sponsor Memo

BILL NUMBER:S4245

TITLE OF BILL: An act to amend the vehicle and traffic law, in
relation to sanctions for credit card charge backs on motor vehicle
fees

Purpose of the Bill:

This bill would authorize the Department of Motor Vehicles (DMV) to
impose sanctions against persons who pay for fees with a credit card
and thereafter use the card "charge back" system to avoid payment.

Summary of Provisions:

Section one of the bill would amend Vehicle and Traffic Law (VTL)
202-b by providing for possible suspension of a customer's driver's
license and/or registration when the fee for those documents was paid
by credit card and the customer subsequently contests the credit card
charge such that the fee is charged back to DMV. The customer would be
given time to make payment prior to the suspension taking effect.

Section two of the bill would provide that the law becomes effective
in 120 days. Existing Law:

VTL § 202-b currently authorizes DMV to impose a penalty and suspend
licenses and registrations only for dishonored checks.

Prior Legislative History:

This proposal was introduced as S. 4918 in 2003 and passed the Senate
in 2003 and 2004.

Statement in Support:

DMV has experienced an increase in a relatively new type of fraudulent
activity associated with credit card transactions. A customer will pay
a license or registration fee with a credit card and then
illegitimately contest the charge with the customer's credit card
company to obtain a "charge back." By requesting a charge back for a
valid DMV charge, these customers are able to obtain a valid license
or registration that they have not paid for.

While VTL § 202-b currently allows DMV to suspend the license or
registration of a customer whose check is dishonored, there is no
similar mechanism for those who defraud DMV by illegitimately
requesting a charge back on their credit card transaction. The same
safeguards applicable to dishonored checks would apply to charge
backs. Before the suspension would take effect, DMV would notify the
customer in writing that a fee is due. The customer would have 30 days
from notification within which to make the payment to DMV to avoid
suspension.

Both the volume of charge backs and the dollar amount per charged back
transaction have been increasing. DMV anticipates that this trend will
continue as the range of transactions payable by credit card expands,
and especially as additional internet transactions are offered. In
fiscal year 2010-11, DMV received an average of 100 chargeback


requests per month from credit card issuers. DMV was able to recover
only 50% of the unpaid fees associated with credit card charge backs
($158,457 out of $306,898). In addition to this lost revenue, DMV has
incurred additional expenses because credit card companies may charge
$10.00 per charge back.

Budget Implications:

By imposing sanctions, this bill will increase revenue to the State by
reducing the number of unpaid transaction fees for driver's licenses
and registrations.

Local Impact:

None.

Effective Date

This act shall take effect 120 days after becoming law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4245

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                             March 15, 2013
                               ___________

Introduced  by  Sen. FUSCHILLO -- (at request of the Department of Motor
  Vehicles) -- read twice and ordered printed, and when  printed  to  be
  committed to the Committee on Transportation

AN  ACT  to  amend the vehicle and traffic law, in relation to sanctions
  for credit card charge backs on motor vehicle fees

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

  Section  1.  Section 202-b of the vehicle and traffic law, as added by
chapter 190 of the laws of 1990, is amended to read as follows:
  S 202-b. Penalties for submission of dishonored checks AND CREDIT CARD
PAYMENTS. A thirty-five dollar penalty  fee  shall  be  charged  to  any
person who has submitted a check to the commissioner or his or her agent
as  payment for any license, permit or registration or any other type of
fee for any type of transaction as required by  this  chapter  and  such
check  has  been  dishonored.  Such  thirty-five dollar penalty shall be
added to the amount due to the commissioner. In  addition,  any  or  all
licenses, permits or registrations issued in the name of such person may
be  suspended  WHERE SUCH PERSON'S CHECK HAS BEEN DISHONORED, OR, IN THE
CASE OF A CREDIT CARD PAYMENT, WHERE THE PAYMENT IS CONTESTED AND IS NOT
HONORED BY THE CREDIT CARD COMPANY and, if a suspension has been issued,
any other transaction in the name of such person  with  this  department
may  be  prohibited  until  full  satisfaction  of the amount due to the
commissioner and, IN THE CASE OF A  DISHONORED  CHECK,  the  thirty-five
dollar penalty fee is paid to the commissioner. No such suspension shall
be  issued  until thirty days after notification that the check has been
dishonored OR THE CREDIT CARD PAYMENT HAS NOT BEEN HONORED BY THE CREDIT
CARD COMPANY is mailed to such person. If satisfaction  is  made  within
thirty days from the date of mailing of such notification, no suspension
shall be issued.
  S 2. This act shall take effect on the one hundred twentieth day after
it  shall  have become a law and shall apply to all payments received on
or after such date.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09092-01-3

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