Check Payments(Privacy Rights)

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AB 2880 (Areias) - Chapter 637, Statutes of 1990

Effective January 1, 1991

(Civ. C.~1725)

The statute prohibits:

(1) requiring a check writer to display a credit card as a condition of accepting the check, for identification, or for any other purpose;

(2) requiring a check writer to sign a statement agreeing to allow their credit card to be charged if the check is dishonored;

(3) recording a credit card number in connection with a check writing transaction; or

(4) contacting a credit card issuer to determine if the amount of the credit available to the check writer will cover the check.

The statute does NOT prohibit:

(1) requiring reasonable forms of positive identification other than a credit card, such as a driver's license or California state identification card, as a condition of accepting the check;

(2) requesting the display of a credit card to indicate credit worthiness or financial responsibility or as additional identification, if the only information recorded is the type of credit card, the issuer or the expiration date (the number itself cannot be recorded);

(3) requesting the production of or recording a credit card number as condition of cashing a check if the person has agreed with the credit card issuer to cash checks as a service to cardholders of the issuer, the issuer has agreed to guarantee cardholder checks cashed by that person and the cardholder has agreed; or

(4) requesting receiving, or recording a credit card number instead of requiring a deposit to secure payment in case of default, loss, damage or other occurrence (such as to secure hotel reservations). The statute also does not require acceptance of a check, whether or not a credit card is presented.

The statute does not apply to: cards or other devices used to obtain telephone property, labor or services in transactions under public utility tariffs; devices used to obtain credit through electronic fund transfer when a consumer's asset account is overdrawn or to maintain a minimum balance in the consumer's account; keys or card keys used at automatic dispensing outlets to obtain or purchase petroleum products for consumer purposes; or check guarantee cards.

Violations of the statute are subject to a civil penalty of up to $250 for a first violation and up to $1,000 for subsequent violations in an action brought by the check writer, Attorney General, District or City Attorney. No penalty would be assessed for unintentional violations resulting from a bona fide error made despite maintenance of procedures reasonably adopted to avoid the error. The civil penalty would be paid to the check writer or to the general fund of the government entity, that brought the action. The statute also authorizes actions for injunctive relief by any of these governmental agencies and authorizes the court to require the defendant to pay any or all cost incurred by them in seeking or obtaining the injunctive relief.

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