OLR Bill Analysis

sHB 7015

AN ACT CONCERNING DEBIT CARD FRAUD AND PENALTIES FOR COLLECTION OF RENTAL PAYMENTS ON FORECLOSED PROPERTY.

SUMMARY

This bill expands credit card crimes to cover crimes involving debit cards. It defines a debit card as any card, code, device, or other means of access, or combination of them that (1) is issued or authorized to debit an asset account held directly or indirectly by a financial institution and (2) the cardholder may use to obtain money, goods, services, or anything of value. It does not have to be called a debit card; specifically includes payroll and ATM cards; and excludes checks, drafts, or similar paper instruments and their electronic representations. The bill also changes how notice of a card's revocation must be sent for purposes of these crimes and expands certain credit card crimes to cover falsely loading payment cards (credit or debit cards) into digital wallets.

The bill also makes it a form of larceny for a previous mortgagor of real property against whom a final foreclosure judgment has been entered to continue to collect rent after the final judgment if he or she has no right to do so. Generally, larceny crimes punish someone who wrongfully takes property from its owner, intending to deprive another of the property or appropriate it to someone else. The penalty for larceny varies based on the amount of property taken, from a class C misdemeanor (punishable by up to three months in prison, a fine of up to $500, or both) to a class B felony (punishable by up to 20 years in prison, a fine of up to $15,000, or both).

EFFECTIVE DATE: October 1, 2017

CREDIT AND DEBIT CARD CRIMES

The bill expands the credit card crimes described in Table 1 to cover the same conduct involving debit cards.

Table 1: Credit Card Crimes Expanded by the Bill to Cover Debit Cards

Citation

Conduct

Penalty

53a-128b

Knowingly making a false statement in writing, with the intent that it be relied on, about a person's identity or financial condition to procure a card

Class A misdemeanor

(punishable by up to one year in prison, a fine of up to $2,000, or both)

53a-128c(a)

Taking a card from someone without the cardholder's or issuer's consent or receiving a card knowing it was taken without consent and with intent to use, sell, or transfer it to another

Class A misdemeanor

53a-128c(b)

Receiving a card knowing it is lost, mislaid, or delivered by mistake and keeping it with intent to use, sell, or transfer it to someone

Class A misdemeanor

53a-128c(c)

Non-issuer selling a card or anyone buying a card from someone other than an issuer

Class A misdemeanor

53a-128c(d)

Obtaining control over a card as security for a debt, with intent to defraud

Class A misdemeanor

53a-128c(e)

Receiving cards issued in the names of at least two people that the person has reason to know were taken or kept under circumstances that amount to card theft or certain other card crimes

Class D felony

(punishable by up to five years in prison, a fine of up to $5,000, or both)

53a-128c(f)

Falsely making or embossing a card with intent to defraud

Class D felony

53a-128c(g)

Someone other than a cardholder or authorized person signing a card with intent to defraud

Class A misdemeanor

53a-128d

With intent to defraud:

1. using a card obtained or retained through false statements to obtain money, goods, services, or anything of value;

2. obtaining money, goods, services, or anything of value by representing without the cardholder's consent that he or she is the cardholder and the card has not in fact been issued; or

3. using an illegally obtained or retained card or one known to be forged, expired, or revoked, as authority or identification to cash, attempt to cash, negotiate, or transfer a check or other money order that would violate checking laws

If value of money or property illegally obtained within six months is up to $500: Class A misdemeanor

If value exceeds $500 within six months: Class D felony

53a-128e(a)

Furnishing money, goods, services, or anything of value when (1) presented with a card obtained by theft or certain other illegal means or which the person knows is forged, expired, or revoked and (2) intending to defraud the issuer, participating party, cardholder, or someone else

If value of money or property illegally obtained within six months is up to $500: Class A misdemeanor

If value exceeds $500 within six months: Class D felony

53a-128e(b)

Falsely representing in writing to the card issuer, with intent to defraud, that money, goods, services, or anything of value was furnished upon the appropriate presentation of a card

If difference in value of money or property furnished exceeds the value represented, within six months, is up to $500: Class A misdemeanor

If value exceeds $500 within six months: Class D felony

53a-128f

Someone, other than cardholder, possessing or controlling at least two incomplete cards or purported distinctive elements of a card, intending to complete or use them to produce cards without the issuer's consent

Possessing or controlling a distinctive element of a card or machinery, plates, or items designed to produce instruments purporting to be cards when the issuer has not consented to it

Class D felony

For all of these crimes, the bill also expands who is considered a “cardholder.” Under current law, a cardholder is the person named on the card to whom or for whose benefit the card is issued by an issuer. The bill also includes a person who lawfully acquired the card if the card does not have a person's name on it.

Some of the crimes described above (see CGS 53a-128d) punish actions knowingly taken with a revoked card. The law presumes knowledge of a card's revocation four days after notice of it is mailed to the cardholder at his or her address on the card or last known address. The bill eliminates a requirement for the revocation notice to be sent by registered or certified mail, return receipt requested, or by airmail if the address is more than 500 miles away. By law, notice is presumed received 10 days after mailing by registered or certified mail if the address is outside the U.S., Puerto Rico, the Virgin Islands, the Canal Zone, or Canada.

Digital Wallets

The bill expands the false statement crime described above to include false statements to procure the loading of a payment card into a digital wallet ( 2). By law, this crime is a class A misdemeanor.

The bill also makes it a crime to falsely load, or cause false loading of, a payment card into a digital wallet, with intent to defraud. The bill makes this a class D felony ( 3(f)).

The bill defines a digital wallet as a software application used on a computer or other device, including a mobile device, to store digital forms of payment cards that can be used to obtain money, goods, services, or anything of value.

Under the bill, a person falsely loads or causes false loading of a payment card into a digital wallet when he or she stores or causes to be stored on a digital wallet the digital form of a payment card that (1) is falsely made or embossed by the person; (2) is taken, procured, received, or retained by the person under circumstances that amount to certain types of payment card fraud under the bill; or (3) he or she knows is falsely made or embossed, forged, expired, or revoked.

COMMITTEE ACTION

Banking Committee

Joint Favorable Substitute

Yea

19

Nay

0

(03/07/2017)