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SB-33 Contracts for goods or services: waiver: fraud, identity theft, and wrongful use of personal identifying information.(2017-2018)

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Date Published: 03/23/2017 09:00 PM
SB33:v98#DOCUMENT

Amended  IN  Senate  March 23, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 33


Introduced by Senator Dodd
(Principal coauthor: Senator Wieckowski)
(Principal coauthor: Assembly Member Dababneh)
(Coauthors: Senators Hertzberg and Galgiani)
(Coauthor: Assembly Member Chiu)

December 05, 2016


An act to add Section 1624.7 to the Civil Code, relating to contracts.


LEGISLATIVE COUNSEL'S DIGEST


SB 33, as amended, Dodd. Contracts for goods or services: waiver: fraud, identity theft, and wrongful use of personal identifying information.
Existing law generally regulates the formation, terms, conditions, and enforcement of contracts, including what constitutes an unlawful contract. Existing law declares all persons capable of contracting, except minors, persons of unsound mind, and persons deprived of civil rights. Existing law restricts the use and enforcement of waivers of certain rights for specified contracts. Existing law makes it a crime for a person to willfully obtain personal identifying information, as defined, of another person, and use that information for any unlawful purpose, as specified.
This bill would prohibit a person from requiring require that, in any contract between a person and a financial institution, a waiver of a legal right that arises as a result of fraud, identity theft, and any other act related to related to a claim of fraud arising out of the wrongful use of personal identifying information as a condition of entering into a contract for the provision of goods or services. The bill would require any waiver of these rights to or identity theft committed by a party to a contract or its agents or employees be knowing and voluntary, express and in writing, and not a condition of entering into the contract or a condition of providing or receiving goods or services. The bill would assign any person seeking the enforcement of a waiver of these protections the burden of proving that the waiver was knowing and voluntary and not made as a condition of the contract or of providing or receiving goods or services. The bill’s provisions would apply to consumer contracts between a person and a financial institution entered into, altered, modified, renewed, or extended on and after January 1, 2018. The bill would authorize a court to award a plaintiff enforcing her or his rights under these provisions reasonable attorney’s fees.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

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


SECTION 1.

 Section 1624.7 is added to the Civil Code, to read:

1624.7.
 (a) In any consumer contract between a person and a financial institution, a waiver of a legal right related to a claim of fraud arising out of the wrongful use of personal identifying information or identity theft committed by a party to a contract or its agents or employees, including, but not limited to, the waiver of a right to a penalty, remedy, forum, or procedure, and the right to file and pursue a civil action or complaint with, or otherwise notify, a state agency, public prosecutor, law enforcement agency, or any court or other governmental entity, shall be all of the following:
(1) Knowing and voluntary.
(2) Express and in writing.
(3) Not a condition of entering into the contract for goods or services or of providing or receiving goods or services.
(b) A person seeking to enforce a waiver of a right described in subdivision (a) shall have the burden of proving that the waiver is enforceable.
(c) This section shall apply to any waiver in a consumer contract entered into, altered, modified, renewed, or extended on or after January 1, 2018, between any person and a financial institution.
(d) This section shall not affect a legal right, penalty, forum, or procedure for which a waiver is prohibited by law.
(e) For the purposes of this section:
(1) “Identity theft” has the same definition as in Section 1798.92.
(2) “Personal identifying information” has the same definition as in Section 1798.92.
(3) “Financial institution” has the same definition as in Section 4052 of the Financial Code.
(f) In addition to injunctive relief and any other remedies available, a court may award a plaintiff enforcing her or his rights under this section reasonable attorney’s fees.

SECTION 1.Section 1624.7 is added to the Civil Code, to read:
1624.7.

(a)A person shall not require another person to waive a right described in subdivision (h) that arises as a result of fraud, identity theft, or any other act related to the wrongful use of personal identifying information as a condition of entering into a contract for goods or services.

(b)A person shall not refuse to enter into a contract with, or refuse to provide goods or services to, another person on the basis that the other person refuses to waive a right described in subdivision (h) that arises as a result of fraud, identity theft, or any other act related to the wrongful use of personal identifying information.

(c)A waiver of a right described in subdivision (h) that arises as a result of fraud, identity theft, or any other act related to the wrongful use of personal identifying information shall be knowing and voluntary, express and in writing, and shall not be a condition of entering into a contract for goods or services or of providing or receiving goods or services. This subdivision shall not affect a legal right, penalty, forum, or procedure for which a waiver is prohibited by law.

(d)A waiver of a right described in subdivision (h) that arises as a result of fraud, identity theft, or any other act related to the wrongful use of personal identifying information that is required as a condition of entering into a contract for goods or services shall be deemed involuntary, unconscionable, against public policy, and unenforceable. This subdivision shall not affect the enforceability or validity of any other provision of the contract.

(e)A person who seeks to enforce a waiver of a right described in subdivision (h) that arises as a result of fraud, identity theft, or any other act related to the wrongful use of personal identifying information shall have the burden of proving that the waiver was knowing and voluntary and not made as a condition of entering into a contract for goods or services, or of providing or receiving goods or services.

(f)This section shall apply to any contract entered into, altered, modified, renewed, or extended on or after January 1, 2018.

(g)In addition to injunctive relief and any other remedies available, a court may award a plaintiff enforcing her or his rights under this section reasonable attorney’s fees.

(h)This section applies to any legal right, including, but not limited to, the right to a penalty, remedy, forum, or procedure, and the right to file and pursue a civil action or complaint with, or otherwise notify, a state agency, public prosecutor, law enforcement agency, or any court or other governmental entity.

(i)For the purposes of this section:

(1)“Identity theft” has the same definition as in Section 1798.92.

(2)“Personal identifying information” has the same definition as in Section 1798.92.