Senate File 317 SENATE FILE BY COMMITTEE ON JUDICIARY (SUCCESSOR TO SSB 1050) Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to fraudulent use of a credit card, scanning 2 device, or reencoder, and providing a penalty. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 2031SV 80 5 jm/cf/24 PAG LIN 1 1 Section 1. Section 715A.6, subsection 2, Code 2003, is 1 2 amended to read as follows: 1 3 2. An offense under this section is a class"D""C" felony 1 4 if the value of the property or services secured or sought to 1 5 be secured by means of the credit card is greater thanoneten 1 6 thousand dollars. If the value of the property or services 1 7 secured or sought to be secured by means of the credit card is 1 8 greater than one thousand dollars but not more than ten 1 9 thousand dollars, an offense under this section is a class "D" 1 10 felony, otherwise the offense is an aggravated misdemeanor. 1 11 Sec. 2. Section 715A.6, Code 2003, is amended by adding 1 12 the following new subsection: 1 13 NEW SUBSECTION. 3. For purposes of this section, the 1 14 value of the property or services is the highest value of the 1 15 property or services determined by any reasonable standard at 1 16 the time the violation occurred. Any reasonable standard 1 17 includes but is not limited to market value within the 1 18 community, actual value, or replacement value. If property or 1 19 services are secured by two or more acts from the same person 1 20 or location, or from different persons by two or more acts 1 21 which occur in approximately the same location or time period 1 22 so that the acts are attributable to a single scheme, plan, or 1 23 conspiracy, the acts may be considered as a single act and the 1 24 value may be the total value of all property or services 1 25 involved. 1 26 Sec. 3. NEW SECTION. 715A.10 ILLEGAL USE OF SCANNING 1 27 DEVICE OR REENCODER. 1 28 1. A person commits a class "D" felony if the person does 1 29 any of the following: 1 30 a. Uses a scanning device to access, read, obtain, 1 31 memorize, or store, temporarily or permanently, information 1 32 encoded on the magnetic strip or stripe of a payment card 1 33 without the permission of the authorized user of the payment 1 34 card, and with the intent to defraud the authorized user, the 1 35 issuer of the authorized user's payment card, or a merchant. 2 1 b. Uses a reencoder to place information encoded on the 2 2 magnetic strip or stripe of a payment card onto the magnetic 2 3 strip or stripe of a different card without the permission of 2 4 the authorized user of the card from which the information is 2 5 being reencoded, and with the intent to defraud the authorized 2 6 user, the issuer of the authorized user's payment card, or a 2 7 merchant. 2 8 2. A second or subsequent violation of this section is a 2 9 class "C" felony. 2 10 3. As used in this section: 2 11 a. "Merchant" means an owner or operator of a retail 2 12 mercantile establishment or an agent, employee, lessee, 2 13 consignee, officer, director, franchisee, or independent 2 14 contractor of such owner or operator. A "merchant" also means 2 15 a person who receives from an authorized user of a payment 2 16 card, or someone the person believes to be an authorized user, 2 17 a payment card or information from a payment card, or what the 2 18 person believes to be a payment card or information from a 2 19 payment card, as the instrument for obtaining, purchasing, or 2 20 receiving goods, services, money, or anything else of value 2 21 from the person. 2 22 b. "Payment card" means a credit card, charge card, debit 2 23 card, or any other card that is issued to an authorized card 2 24 user and that allows the user to obtain, purchase, or receive 2 25 goods, services, money, or anything else of value from a 2 26 merchant. 2 27 c. "Reencoder" means an electronic device that places 2 28 encoded information from the magnetic strip or stripe of a 2 29 payment card onto the magnetic strip or stripe of a different 2 30 payment card. 2 31 d. "Scanning device" means a scanner, reader, or any other 2 32 electronic device that is used to access, read, scan, obtain, 2 33 memorize, or store, temporarily or permanently, information 2 34 encoded on the magnetic strip or stripe of a payment card. 2 35 EXPLANATION 3 1 This bill relates to the criminal offense of fraudulent use 3 2 of a credit card, scanning device, or reencoder. 3 3 The bill provides that the value of property or services 3 4 fraudulently obtained or attempted to be obtained by use of a 3 5 credit card is to be determined by any reasonable standard, 3 6 including the market value within the community, actual value, 3 7 or replacement value. The bill also provides that if the 3 8 property or services are fraudulently obtained by two or more 3 9 acts from the same person or location, or from different 3 10 persons by two or more acts which occur in approximately the 3 11 same location or time period so that the acts are attributable 3 12 to a single scheme, plan, or conspiracy, the acts may be 3 13 considered as a single act and the value may be the total 3 14 value of all property or services involved. The bill provides 3 15 that if the value of the property or services obtained or 3 16 attempted to be obtained is greater than $10,000 the person 3 17 commits a class "C" felony. If the value of the property or 3 18 services is greater than $1,000 but not more than $10,000 then 3 19 the offense is a class "D" felony; otherwise the offense is an 3 20 aggravated misdemeanor. 3 21 The bill provides that a person who illegally uses a 3 22 scanning device or reencoder commits a class "D" felony for a 3 23 first offense and a class "C" felony for a second or 3 24 subsequent offense. A scanning device is defined under the 3 25 bill to mean a scanner, reader, or other electronic device 3 26 that is used to access or read information encoded on a 3 27 magnetic strip. A reencoder means an electronic device that 3 28 places encoded information from a magnetic strip of a payment 3 29 card onto the magnetic strip of a different payment card. 3 30 An aggravated misdemeanor is punishable by confinement for 3 31 no more than two years and a fine of at least $500 but not 3 32 more than $5,000. A class "D" felony is punishable by 3 33 confinement for no more than five years and a fine of at least 3 34 $750 but not more than $7,500. A class "C" felony is 3 35 punishable by confinement for no more than 10 years and a fine 4 1 of at least $1,000 but not more than $10,000. 4 2 LSB 2031SV 80 4 3 jm/cf/24