S 6299: Limits the liability of a debit cardholder for unauthorized use of a debit card.

  
  STATE OF NEW YORK ________________________________________________________________________ 6299 2025-2026 Regular Sessions  IN SENATE March 10, 2025 ___________ Introduced by Sen. SANDERS -- read twice and ordered printed, and when printed to be committed to the Committee on Consumer Protection AN ACT to amend the general business law, in relation to limiting the liability of a debit cardholder for unauthorized use of a debit card The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 512 of the general business law, as amended by 2 chapter 556 of the laws of 1987, is amended to read as follows: 3 § 512. Limitation of liability for unauthorized use of a credit card 4 or a debit card. 1. A provision which imposes liability upon a holder 5 for a cash advance or loan or for the purchase or lease of property or 6 services obtained by the unauthorized use of a credit card or a debit 7 card shall not be enforceable to the extent that it imposes a greater 8 liability upon the holder than is imposed upon the holder of a credit 9 card under the provisions of the act of congress entitled "Truth in 10 Lending Act" and the regulations thereunder, as such act and regulations 11 may from time to time be amended. 12 2. (a) A cardholder shall be liable for the unauthorized use of a 13 debit card only if: 14 (1) the card is a debit card which the cardholder has requested and 15 received or has signed or has used, or authorized another to use, for 16 the purpose of obtaining money, property, labor, or services; 17 (2) the liability is not in excess of fifty dollars; 18 (3) the card issuer gives adequate notice to the cardholder of the 19 potential liability; 20 (4) the card issuer has provided the cardholder with a description of 21 a means by which the card issuer may be notified of loss or theft of the 22 card, which description may be provided on the face or reverse side of 23 each monthly, quarterly or other periodic account statement issued to 24 the cardholder by the card issuer, as applicable, or on a separate 25 notice accompanying such statement; EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD10387-01-5 
 S. 6299 2 1 (5) the unauthorized use occurs before the card issuer has been noti- 2 fied that an unauthorized use of the debit card has occurred or may 3 occur as the result of loss, theft, or otherwise; and 4 (6) the card issuer has provided a method whereby the user of such 5 card can be identified as the person authorized to use it. 6 (b) For purposes of this section, a card issuer has been notified when 7 such steps as may be reasonably required in the ordinary course of busi- 8 ness to provide the card issuer with the pertinent information have been 9 taken, whether or not any particular officer, employee, or agent of the 10 card issuer does in fact receive such information. 11 (c) In any action by a card issuer to enforce liability for the use of 12 a debit card, the burden of proof is upon the card issuer to show that 13 the use was authorized or, if the use was unauthorized, then the burden 14 of proof is upon the card issuer to show that the conditions of liabil- 15 ity for the unauthorized use of a debit card, as set forth in paragraph 16 (a) of this subdivision, have been met. 17 (d) Nothing in this subdivision imposes liability upon a cardholder 18 for the unauthorized use of a debit card in excess of such cardholder's 19 liability for such use under other applicable law or under any agreement 20 with the card issuer. 21 (e) Except as provided in this subdivision, a cardholder shall not 22 incur any liability from the unauthorized use of a debit card. 23 § 2. This act shall take effect on the ninetieth day after it shall 24 have become a law and shall apply to all transactions occurring on and 25 after such effective date.