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AB-2739 Credit cards: marketing information.(1993-1994)

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AB2739:v94#DOCUMENT

Assembly Bill No. 2739
CHAPTER 188

An act to amend Section 1748.12 of the Civil Code, relating to civil law, and declaring the urgency thereof, to take effect immediately.

[ Filed with Secretary of State  July 11, 1994. Approved by Governor  July 09, 1994. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 2739, Cannella. Credit cards: marketing information.
Existing law, operative July 1, 1994, requires a credit card issuer to provide written notice to all persons who are holders of the issuer’s credit cards prior to disclosing marketing information concerning a consumer which discloses the consumer’s identity to any person, except specified 3rd parties. That notice must clearly and conspicuously describe the cardholder’s right to prohibit that disclosure. Certain communications of marketing information are exempt from this provision.
This bill would recast this provision to, among other things, require that a credit card issuer provide written notice to a cardholder if the issuer discloses the information, and would specify the methods of satisfying this requirement. This bill would declare that it is to take effect immediately as an urgency statute.

The people of the State of California do enact as follows:


SECTION 1.

 Section 1748.12 of the Civil Code is amended to read:

1748.12.
 (a)  For purposes of this section:
(1)  “Cardholder” means any consumer to whom a credit card is issued, provided that in cases when more than one credit card has been issued for the same account, all persons holding those credit cards may be treated as a single cardholder.
(2)  “Credit card” means any card, plate, coupon book, or other single credit device existing for the purpose of being used from time to time upon presentation to obtain money, property, labor, or services on credit. “Credit card” does not mean any of the following:
(A)  Any single credit device used to obtain telephone property, labor, or services in any transaction under public utility tariffs.
(B)  Any device that may be used to obtain credit pursuant to an electronic fund transfer but only if the credit is obtained under an agreement between a consumer and a financial institution to extend credit when the consumer’s asset account is overdrawn or to maintain a specified minimum balance in the consumer’s asset account.
(C)  Any key or card key used at an automated dispensing outlet to obtain or purchase petroleum products, as defined in subdivision (c) of Section 13401 of the Business and Professions Code, which will be used primarily for business rather than personal or family purposes.
(3)  “Marketing information” means the categorization of cardholders compiled by a credit card issuer, based on a cardholder’s shopping patterns, spending history, or behavioral characteristics derived from account activity which is provided to a marketer of goods for consideration. “Marketing information” does not include aggregate data which does not identify a cardholder based on the cardholder’s shopping patterns, spending history, or behavioral characteristics derived from account activity or any communications to any person in connection with any transfer, processing, billing, collection, chargeback, fraud prevention, credit card recovery, or acquisition of or for credit card accounts.
(b)  If the credit card issuer discloses marketing information concerning a cardholder to any person, the credit card issuer shall provide a written notice to the cardholder that clearly and conspicuously describes the cardholder’s right to prohibit the disclosure to marketers of goods of marketing information concerning the cardholder which discloses the cardholder’s identity. The notice shall include either a preprinted form by which the cardholder may exercise this right or shall advise the cardholder of a toll-free telephone number which the cardholder may call to exercise this right.
(c)  The requirements of subdivision (b) may be satisfied by furnishing the notice to the cardholder (1) on or with the credit application, (2) with the credit card when it is delivered to the cardholder, or (3) in any manner and at any time, provided that it is furnished prior to the disclosure of marketing information relating to the cardholder. No notice need be furnished to a cardholder to whom prior notice has been given, as to whom no marketing information will be disclosed, or to whom notice has been given prior to the effective date of this act which complies with the provisions of subdivision (b).
(d)  An election to prohibit disclosure of marketing information, as provided in subdivision (b), shall terminate upon receipt by the credit card issuer of notice from the cardholder that the cardholder’s election under subdivision (b) is no longer effective.
(e)  The requirements of subdivisions (b) and (c) do not apply to any of the following communications of marketing information by a credit card issuer:
(1)  Communications to any party to, or merchant specified in, the credit card agreement, or to any person whose name appears on the credit card or on whose behalf the credit card is issued.
(2)  Communications to consumer credit reporting agencies, as defined in subdivision (d) of Section 1785.3.
(3)  Communications to a corporate subsidiary or affiliate of the card issuer.
(4)  Communications to a third party when the third party is responsible for conveying information from the card issuer to any of its cardholders.
(f)  If the laws of the United States require disclosure to cardholders regarding the use of personal information, compliance with the federal requirements shall be deemed to be compliance with this section.
(g)  This section shall become operative on July 1, 1994.

SEC. 2.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to clarify various provisions of Chapter 622 of the Statutes of 1993, which will become operative July 1, 1994, it is necessary that this act take effect immediately.