S T A T E O F N E W Y O R K
I N S E N A T E
May 14, 2014
Introduced by Sen. SANDERS -- 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 limiting the
liability of a debit cardholder for unauthorized use of a debit card
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 512 of the general business law, as amended by
chapter 556 of the laws of 1987, is amended to read as follows:
S 512. Limitation of liability for unauthorized use of a credit card
or a debit card. 1. A provision which imposes liability upon a holder
for a cash advance or loan or for the purchase or lease of property or
services obtained by the unauthorized use of a credit card or a debit
card shall not be enforceable to the extent that it imposes a greater
liability upon the holder than is imposed upon the holder of a credit
card under the provisions of the act of congress entitled "Truth in
Lending Act" and the regulations thereunder, as such act and regulations
may from time to time be amended.
2. (A) A CARDHOLDER SHALL BE LIABLE FOR THE UNAUTHORIZED USE OF A
DEBIT CARD ONLY IF:
(1) THE CARD IS A DEBIT CARD WHICH THE CARDHOLDER HAS REQUESTED AND
RECEIVED OR HAS SIGNED OR HAS USED, OR AUTHORIZED ANOTHER TO USE, FOR
THE PURPOSE OF OBTAINING MONEY, PROPERTY, LABOR, OR SERVICES;
(2) THE LIABILITY IS NOT IN EXCESS OF FIFTY DOLLARS;
(3) THE CARD ISSUER GIVES ADEQUATE NOTICE TO THE CARDHOLDER OF THE
(4) THE CARD ISSUER HAS PROVIDED THE CARDHOLDER WITH A DESCRIPTION OF
A MEANS BY WHICH THE CARD ISSUER MAY BE NOTIFIED OF LOSS OR THEFT OF THE
CARD, WHICH DESCRIPTION MAY BE PROVIDED ON THE FACE OR REVERSE SIDE OF
EACH MONTHLY, QUARTERLY OR OTHER PERIODIC ACCOUNT STATEMENT ISSUED TO
THE CARDHOLDER BY THE CARD ISSUER, AS APPLICABLE, OR ON A SEPARATE
NOTICE ACCOMPANYING SUCH STATEMENT;
(5) THE UNAUTHORIZED USE OCCURS BEFORE THE CARD ISSUER HAS BEEN NOTI-
FIED THAT AN UNAUTHORIZED USE OF THE DEBIT CARD HAS OCCURRED OR MAY
OCCUR AS THE RESULT OF LOSS, THEFT, OR OTHERWISE; AND
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
S. 7421 2
(6) THE CARD ISSUER HAS PROVIDED A METHOD WHEREBY THE USER OF SUCH
CARD CAN BE IDENTIFIED AS THE PERSON AUTHORIZED TO USE IT.
(B) FOR PURPOSES OF THIS SECTION, A CARD ISSUER HAS BEEN NOTIFIED WHEN
SUCH STEPS AS MAY BE REASONABLY REQUIRED IN THE ORDINARY COURSE OF BUSI-
NESS TO PROVIDE THE CARD ISSUER WITH THE PERTINENT INFORMATION HAVE BEEN
TAKEN, WHETHER OR NOT ANY PARTICULAR OFFICER, EMPLOYEE, OR AGENT OF THE
CARD ISSUER DOES IN FACT RECEIVE SUCH INFORMATION.
(C) IN ANY ACTION BY A CARD ISSUER TO ENFORCE LIABILITY FOR THE USE OF
A DEBIT CARD, THE BURDEN OF PROOF IS UPON THE CARD ISSUER TO SHOW THAT
THE USE WAS AUTHORIZED OR, IF THE USE WAS UNAUTHORIZED, THEN THE BURDEN
OF PROOF IS UPON THE CARD ISSUER TO SHOW THAT THE CONDITIONS OF LIABIL-
ITY FOR THE UNAUTHORIZED USE OF A DEBIT CARD, AS SET FORTH IN PARAGRAPH
(A) OF THIS SUBDIVISION, HAVE BEEN MET.
(D) NOTHING IN THIS SUBDIVISION IMPOSES LIABILITY UPON A CARDHOLDER
FOR THE UNAUTHORIZED USE OF A DEBIT CARD IN EXCESS OF HIS OR HER LIABIL-
ITY FOR SUCH USE UNDER OTHER APPLICABLE LAW OR UNDER ANY AGREEMENT WITH
THE CARD ISSUER.
(E) EXCEPT AS PROVIDED IN THIS SUBDIVISION, A CARDHOLDER SHALL NOT
INCUR ANY LIABILITY FROM THE UNAUTHORIZED USE OF A DEBIT CARD.
S 2. This act shall take effect on the ninetieth day after it shall
have become a law and shall apply to all transactions occurring on and
after such effective date.