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A BILL TO BE ENTITLED
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AN ACT
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relating to a merchant's duty to cooperate with a law enforcement |
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investigation of fraudulent or unauthorized use of a credit or |
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debit card or other access device. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Title 12, Business & Commerce Code, is amended by |
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adding Chapter 606 to read as follows: |
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CHAPTER 606. INVESTIGATION OF CREDIT CARD, DEBIT CARD, OR OTHER |
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ACCESS DEVICE FRAUD |
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Sec. 606.001. DEFINITIONS. In this chapter: |
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(1) "Access device" means a card or device issued by a |
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financial institution that contains a magnetic stripe, |
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microprocessor chip, or other means for storing information. The |
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term includes a credit card, debit card, or stored value card. |
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(2) "Financial institution" means a bank, savings |
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association, savings bank, or credit union maintaining an office, |
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branch, or agency office in this state. |
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(3) "Merchant" means a person, other than a financial |
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institution, transacting business in this state that accepts an |
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access device in connection with a transaction. |
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Sec. 606.002. DUTY OF MERCHANT TO COOPERATE WITH |
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INVESTIGATION. When a fraudulent or unauthorized transaction or |
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activity involving an access device is reported to a federal, |
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state, or local law enforcement agency, the merchant that accepted |
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the access device in connection with the transaction shall |
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reasonably cooperate with the law enforcement agency in the |
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investigation of that transaction or activity. For purposes of |
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this subsection, reasonable cooperation includes: |
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(1) facilitating an interview of relevant personnel; |
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and |
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(2) producing security or surveillance information, |
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if any, with regard to the unauthorized transaction or activity. |
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Sec. 606.003. ACTION AGAINST MERCHANT. (a) A financial |
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institution may bring an action against a merchant that accepts an |
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access device in connection with a fraudulent or unauthorized |
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transaction if at the time of the investigation, the merchant |
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wilfully refuses to reasonably cooperate with a law enforcement |
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agency as required under Section 606.002. |
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(b) A financial institution that brings an action under this |
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section may recover actual damages arising from the merchant's |
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violation of this chapter. Actual damages include any cost |
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incurred by the financial institution in connection with: |
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(1) the cancellation or reissuance of an access device |
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affected by the fraudulent or unauthorized transaction or activity; |
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and |
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(2) a refund or credit made to an account holder to |
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cover the cost of any fraudulent or unauthorized transaction or |
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activity. |
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SECTION 2. This Act takes effect September 1, 2011. |