H.F. 2199 Section 1. Section 715A.10, Code 2018, is amended to read 1 as follows: 2 715A.10 Illegal use of scanning device or reencoder encoding 3 machine . 4 1. A person commits a class “D” felony if the person does 5 any of the following: 6 a. Uses Directly or indirectly uses a scanning device 7 to access, read, obtain, memorize, or store, temporarily 8 or permanently, information encoded on the magnetic strip 9 or stripe of a payment card without the permission of the 10 authorized user of the payment card, and with the intent to 11 defraud the authorized user, the issuer of the authorized 12 user’s payment card, or a merchant. 13 b. Uses a reencoder Directly or indirectly uses an encoding 14 machine to place information encoded on the magnetic strip or 15 stripe of a payment card onto the magnetic strip or stripe of a 16 different payment card without the permission of the authorized 17 user of the payment card from which the information is being 18 reencoded was obtained , and with the intent to defraud the 19 authorized user, the issuer of the authorized user’s payment 20 card, or a merchant. 21 1A. A person commits an aggravated misdemeanor if the person 22 possesses a scanning device with the intent to use such device 23 to obtain information encoded on a payment card without the 24 permission of the authorized user of the payment card, the 25 issuer of the authorized user’s payment card, or a merchant, or 26 possesses a scanning device with knowledge that a person other 27 than the authorized user, the issuer of the authorized user’s 28 payment card, or a merchant intends to use the scanning device 29 to obtain information encoded on a payment card without the 30 permission of the authorized user, the issuer of the authorized 31 user’s payment card, or a merchant. 32 2. A second or subsequent violation of this section is a 33 class “C” felony. 34 3. As used in this section : 35 -1- LSB 5352HV (4) 87 jm/rh 1/ 4

H.F. 2199 a. “Encoding machine” means an electronic device that is 1 used to encode information onto a payment card. 2 a. b. “Merchant” means an owner or operator of a retail 3 mercantile establishment or an agent, employee, lessee, 4 consignee, officer, director, franchisee, or independent 5 contractor of such owner or operator. A “merchant” also means 6 includes an establishing financial institution referred to 7 in section 527.5, a person who receives from an authorized 8 user of a payment card, or someone the person believes to 9 be an authorized user, a payment card or information from a 10 payment card, or what the person believes to be a payment card 11 or information from a payment card, as the instrument for 12 obtaining, purchasing, or receiving goods, services, money, or 13 anything else of value from the person. 14 b. c. “Payment card” means a credit card, charge card, 15 debit card, access device as defined in section 527.2, or 16 any other card that is issued to an authorized card user and 17 that allows the user to obtain, purchase, or receive goods, 18 services, money, or anything else of value from a merchant. 19 c. “Reencoder” means an electronic device that places 20 encoded information from the magnetic strip or stripe of a 21 payment card onto the magnetic strip or stripe of a different 22 payment card. 23 d. “Scanning device” means a scanner, reader, wireless 24 access device, radio frequency identification scanner, an 25 electronic device that utilizes near field communications 26 technology, or any other electronic device that is used to 27 access, read, scan, obtain, memorize, or store, temporarily 28 or permanently, information encoded on the magnetic strip or 29 stripe of a payment card. 30 Sec. 2. Section 716.5, subsection 1, Code 2018, is amended 31 by adding the following new paragraph: 32 NEW PARAGRAPH . f. The act is committed upon real or 33 personal property that has the ability to process a payment 34 card as defined in section 715A.10. 35 -2- LSB 5352HV (4) 87 jm/rh 2/ 4

H.F. 2199 EXPLANATION 1 The inclusion of this explanation does not constitute agreement with 2 the explanation’s substance by the members of the general assembly. 3 This bill relates to the illegal use of a scanning device or 4 encoding machine. 5 ILLEGAL USE OF SCANNING DEVICE OR ENCODING MACHINE. The bill 6 replaces the term “reencoder” with the term “encoding machine”. 7 The bill defines “encoding machine” to mean an electronic 8 device that is used to encode information to a payment card. 9 The bill also expands the definition of “merchant” to 10 include an establishing financial institution referred to in 11 Code section 524.5. 12 The bill modifies the definition of “payment card” to 13 include an access device as defined in Code section 527.2. 14 The bill also modifies the term “scanning device” to include 15 a wireless access device, a radio frequency identification 16 scanner, an electronic device that utilizes near field 17 communications technology, and any other electronic device used 18 to access, read, scan, obtain, memorize, or store information 19 encoded on a payment card. 20 A person commits a class “D” felony under the bill if the 21 person directly or indirectly uses a scanning device to access, 22 read, obtain, memorize, or store, temporarily or permanently, 23 information encoded on a payment card without the permission 24 of the authorized user, the issuer of the authorized user’s 25 payment card, or a merchant. In order to commit this offense 26 currently, a person must use a scanning device to access, 27 read, obtain, memorize, or store, temporarily or permanently, 28 information encoded on the magnetic strip or stripe of a 29 payment card without the permission of the authorized user of 30 the payment card, and with the intent to defraud the authorized 31 user, the issuer of the authorized user’s payment card, or a 32 merchant. 33 A person commits a class “D” felony under the bill if the 34 person directly or indirectly uses an encoding machine to place 35 -3- LSB 5352HV (4) 87 jm/rh 3/ 4

H.F. 2199 information encoded on a payment card onto a different payment 1 card without the permission of the authorized user, the issuer 2 of the authorized user’s payment card, or a merchant. In order 3 to commit this offense currently, a person must use a reencoder 4 to place information encoded on the magnetic strip or stripe of 5 a payment card onto the magnetic strip or stripe of a different 6 card without the permission of the authorized user of the 7 card from which the information is being reencoded, and with 8 the intent to defraud the authorized user, the issuer of the 9 authorized user’s payment card, or a merchant. 10 A class “D” felony is punishable by confinement for no more 11 than five years and a fine of at least $750 but not more than 12 $7,500. 13 The bill creates a new criminal offense. Under the bill, 14 a person shall not possess a scanning device with the intent 15 to use such device to obtain information encoded on a payment 16 card without permission of the authorized user, the issuer of 17 the authorized user’s payment card, or a merchant, or possess 18 a scanning device with knowledge that a person other than the 19 authorized user, the issuer of the authorized user’s payment 20 card, or a merchant intends to use the scanning device to 21 obtain information encoded on a payment card without permission 22 from the authorized user, the issuer of the authorized user’s 23 payment card, or a merchant. A person who violates this 24 provision commits an aggravated misdemeanor. An aggravated 25 misdemeanor is punishable by confinement for no more than two 26 years and a fine of at least $625 but not more than $6,250. 27 CRIMINAL MISCHIEF IN THE THIRD DEGREE. If a person 28 intentionally damages, defaces, alters, or destroys property 29 upon real or personal property that has the ability to process 30 a payment card as defined in Code section 715A.10 in the bill, 31 with no right to do such an act, that person commits criminal 32 mischief in the third degree. Criminal mischief in the third 33 degree is an aggravated misdemeanor. 34 -4- LSB 5352HV (4) 87 jm/rh 4/ 4