senate Bill S5826

Signed By Governor
2013-2014 Legislative Session

Imposes sanctions for credit card charge backs on motor vehicle fees

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Archive: Last Bill Status Via A7689 - Signed by Governor


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jul 31, 2013 signed chap.236
Jul 19, 2013 delivered to governor
Jun 20, 2013 returned to assembly
passed senate
3rd reading cal.1516
substituted for s5826
Jun 20, 2013 substituted by a7689a
ordered to third reading cal.1516
Jun 17, 2013 referred to rules

Votes

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S5826 - Bill Details

See Assembly Version of this Bill:
A7689A
Law Section:
Vehicle and Traffic Law
Laws Affected:
Amd §202-b, V & T L

S5826 - Bill Texts

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

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BILL NUMBER:S5826

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: To authorize the Department of Motor Vehicles 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: Bill section 1 would amend section 202-b of
the Vehicle and Traffic Law by prohibiting to provide that when the
fee for one's business or driver's license and/or registration was
paid by credit card, the person subsequently contests the credit card
charge and causes the fee to be charged back to the Department, any
further transactions with DMV in the name of such person may be
prohibited until payment is made in full.

The bill would take effect 120 days after receiving Executive
approval.

EXISTING LAW: Currently, the Vehicle and Traffic Law only authorizes a
civil penalty and sanctions for dishonored checks.

JUSTIFICATION: 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. This proposal includes the ability to sanction a customer who
pays a DMV fee via a credit card and then subsequently requests a
'charge back' with their credit card company by prohibiting any future
transactions with DMV until full payment has been made.

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
510.00 per charge back.

LEGISLATIVE HISTORY: Similar legislation was introduced as S. 4918 and
passed the Senate in 2003 and 2004.


FISCAL 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.

EFFECTIVE DATE: On-hundred twentieth day after it shall have become
law

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

                                  5826

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              June 17, 2013
                               ___________

Introduced by Sen. FUSCHILLO -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

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) 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 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 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 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.  (B) IN ANY CASE WHERE A PERSON HAS MADE A CREDIT CARD
PAYMENT 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 CREDIT CARD PAYMENT IS
CONTESTED AND IS NOT HONORED BY THE CREDIT CARD COMPANY, ANY OTHER TRAN-
SACTION  IN THE NAME OF SUCH PERSON WITH THE DEPARTMENT MAY BE PROHIBIT-
ED, UPON AT LEAST THIRTY DAYS NOTICE, UNTIL  FULL  SATISFACTION  OF  THE
AMOUNT DUE TO THE COMMISSIONER HAS BEEN PAID.
  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.
                                                           LBD09092-04-3

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