Senator RICHARD J. CODEY
District 27 (Essex)
Requires disclosure of all fees and charges associated with prepaid debit cards on the package of such cards.
CURRENT VERSION OF TEXT
An Act concerning prepaid debit cards and supplementing P.L.1960, c.39 (C.56:8-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. As used in this section:
“Dormancy fee” means a charge imposed against the unused value of a prepaid debit card due to inactivity.
"Financial institution" means any entity chartered or licensed by the United States or by any state, that is authorized to conduct business relating to, or is held out to the public as a place of, the deposit of funds or medium of savings or collective investment, including, without limitation, banks and trust companies, savings banks, bank holding companies, building and loan associations, savings and loan associations, credit unions, insurance companies, and investment trusts.
“Issuer” means a business organization or financial institution that issues a prepaid debit card, or its duly authorized agent.
“Prepaid debit card” means a tangible instrument or device, whether known as a debit card, automated teller machine card, or by any other name, issued with or without fee by an issuer, whereon is embedded or encoded in an electronic or other format a predetermined value which the cardholder may use to obtain money, goods, services, or anything else of relative worth through an electronic authorization to debit from that value or the remaining balance of the instrument or device.
b. An issuer of a prepaid debit card shall provide, for the benefit and use of the cardholder recipient or potential recipient, a disclosure of all fees and charges associated with the activation and use of the prepaid debit card, including with respect to any transaction or service provided by or with the card, and any dormancy fee for non-use, in a clear and conspicuous manner on the card’s package.
c. It is an unlawful practice and a violation of P.L.1960, c.39 (C.56:8-1 et seq.) to violate the provisions of this section.
2. The Director of the Division of Consumer Affairs in the Department of Law and Public Safety shall adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), regulations necessary to implement this act.
3. This act shall take effect on the first day of the seventh month next following enactment, but the Director of the Division of Consumer Affairs may take any anticipatory administrative action in advance thereof as shall be necessary for the implementation of this act.
This bill requires an issuer of a prepaid debit card to provide, for the benefit and use of the cardholder recipient or potential recipient, a disclosure of all fees and charges associated with the activation and use of the prepaid debit card, including with respect to any transaction or service provided by or with the card, and any dormancy fee for non-use, in a clear and conspicuous manner on the card’s package. The Director of the Division of Consumer Affairs shall adopt rules and regulations necessary to implement the provisions of the bill with respect to such disclosures.
A violation of the bill shall be an unlawful practice and violation of the consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.). Under the consumer fraud act, a violation is generally punishable by a monetary penalty of not more than $10,000 for a first offense, and not more than $20,000 for any subsequent offense. In addition, a violation may result in cease and desist orders issued by the Attorney General, the awarding of treble damages, and attorney’s fees and costs to an injured party.