Senate Bill S760

                                BILL NUMBER:S760

TITLE OF BILL:
An act to amend the general business law, in relation to prohibiting
issuers from accepting personal financial information of holders from a
third-party

PURPOSE:
This bill would prohibit card issuers from
knowingly accepting or soliciting personal financial information about a
cardholder from a person other than the card holder.

SUMMARY OF PROVISIONS:
This bill would add a new
Section 518-b to the General Business Law, which would prohibit issuers
of credit cards and debit cards from knowingly accepting or soliciting
the personal information of a holder from a person other than the card
holder. A violation of these provisions would be punishable by a civil
penalty not to exceed two thousand dollars for each such violation.

JUSTIFICATION:
Third-parties should not be permitted
to give personal information about a credit or debit cardholder to the
issuer of the card. The cardholder is ultimately responsible for the use
of the card, and their credit history is effected by any use of or
changes to the account. Any errors in the information provided by a
              

third-party might be recorded on a consumer credit report, where even
providing a different street address can affect a consumer's credit
history. Also, if a third-party were permitted to give the address of
the cardholder to the issuer, they might be able to divert monthly
statements to another address or raise the limit of the line of credit
attached to the card. Likewise, in the case of a divorced spouse or when
a child is a third-party user of their parent's card, such a user might
be able to cause harm to the cardholder or the cardholder's credit by
Riving inaccurate or misleading information to the issuer.

In recognition of the fact that the cardholder is ultimately responsible
for the use of their card, this legislation would make them the sole
source of personal information about themselves. At the seine time, this
bill would not limit the transmittal of financial or transaction
information by merchants or businesses, in recognition of the fact that
the transmittal of these types of information is necessary for the use
of credit and debit cards.

LEGISLATIVE HISTORY:
2011-2012: Consumer Protection Committee (S.5061)
2007-2008: Consumer Protection Committee (S.4308/A/6852)
2005-2006: Consumer Protection Committee (S.4687/A.9321)

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
On the first of September next
succeeding the date on which it shall have become a law.