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Senate File 2238 - IntroducedA Bill ForAn Act 1relating to the criminal offenses of the illegal use of
2a scanning device or encoding machine and criminal mischief
3in the third degree, and providing penalties.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 715A.10, Code 2018, is amended to read
2as follows:
3715A.10 Illegal use of scanning device or reencoder encoding
4machine.
51. A person commits a class “D” felony if the person does
6any of the following:
7a. Uses Directly or indirectly uses a scanning device
8to access, read, obtain, memorize, or store, temporarily
9or permanently, information encoded on the magnetic strip
10or stripe of a payment card without the permission of the
11authorized user of the payment card, and with the intent to
12defraud the authorized user, the issuer of the authorized
13user’s payment card, or a merchant.
14b. Possesses a scanning device with the intent to use such
15device to obtain information encoded on a payment card without
16the permission of the authorized user of the payment card, the
17issuer of the authorized user’s payment card, or a merchant, or
18possesses a scanning device with knowledge that a person other
19than the authorized user, the issuer of the authorized user’s
20payment card, or a merchant intends to use the scanning device
21to obtain information encoded on a payment card without the
22permission of the authorized user, the issuer of the authorized
23user’s payment card, or a merchant.
24b. c. Uses a reencoder Directly or indirectly uses an
25encoding machine to place information encoded on the magnetic
26strip or stripe of a payment card onto the magnetic strip
27or stripe of a different payment card without the permission
28of the authorized user of the payment card from which the
29information is being reencoded was obtained, and with the
30intent to defraud the authorized user, the issuer of the
31authorized user’s payment card, or a merchant.
322. A second or subsequent violation of this section is a
33class “C” felony.
343. As used in this section:
35a. “Encoding machine” means an electronic device that is
-1-1used to encode information onto a payment card.
2a. b. “Merchant” means an owner or operator of a retail
3mercantile establishment or an agent, employee, lessee,
4consignee, officer, director, franchisee, or independent
5contractor of such owner or operator. A “merchant” also means
6 includes an establishing financial institution referred to
7in section 527.5, a person who receives from an authorized
8user of a payment card, or someone the person believes to
9be an authorized user, a payment card or information from a
10payment card, or what the person believes to be a payment card
11or information from a payment card, as the instrument for
12obtaining, purchasing, or receiving goods, services, money, or
13anything else of value from the person.
14b. c. “Payment card” means a credit card, charge card,
15debit card, access device as defined in section 527.2, or
16any other card that is issued to an authorized card user and
17that allows the user to obtain, purchase, or receive goods,
18services, money, or anything else of value from a merchant.
19c. “Reencoder” means an electronic device that places
20encoded information from the magnetic strip or stripe of a
21payment card onto the magnetic strip or stripe of a different
22payment card.
23d. “Scanning device” means a scanner, reader, wireless
24access device, radio frequency identification scanner, an
25electronic device that utilizes near field communications
26technology, or any other electronic device that is used to
27access, read, scan, obtain, memorize, or store, temporarily
28or permanently, information encoded on the magnetic strip or
29stripe of a payment card.
30 Sec. 2. Section 716.5, subsection 1, Code 2018, is amended
31by adding the following new paragraph:
32 NEW PARAGRAPH. f. The act is committed upon real or
33personal property that has the ability to process a payment
34card as defined in section 715A.10.
35EXPLANATION
-2-1The inclusion of this explanation does not constitute agreement with
2the explanation’s substance by the members of the general assembly.
3This bill modifies certain criminal acts that involve
4payment cards.
5Current Code section 715A.10 prohibits a person from
6using a scanning device to access information encoded on
7the magnetic strip or stripe of a payment card without the
8permission of the authorized user of the payment card, and with
9the intent to defraud the authorized user, the issuer of the
10authorized user’s payment card, or a merchant. A person is
11also prohibited from using a reencoder to place information
12encoded on the magnetic strip or stripe of a payment card
13onto the magnetic strip or stripe of another card without the
14permission of the authorized user of the card from which the
15information is being reencoded, and with the intent to defraud
16the authorized user, the issuer of the authorized user’s
17payment card, or a merchant.
18The bill makes several changes to terminology in Code
19section 715A.10. The bill replaces the term “reencoder” with
20“encoding machine”, defined as an electronic device that is
21used to encode information onto a payment card. The bill
22expands the definition of “merchant” to include an establishing
23financial institution as referred to in Code section 527.5.
24The bill expands the definition of “payment card” to include
25an access device as defined in Code section 527.2. The
26bill expands the definition of “scanning device” to include
27a wireless access device, radio frequency identification
28scanner, and an electronic device that utilizes near-field
29communications technology. The bill removes any references to
30the magnetic strip or stripes of payment cards in Code section
31715A.10.
32The bill broadens the prohibitions against using a scanning
33device or encoding machine to commit fraud by prohibiting the
34direct or indirect use of such a device or machine. The bill
35also removes the requirement that a person have intent to
-3-1defraud for the prohibitions against using a scanning device or
2encoding machine to commit fraud.
3The bill makes it a criminal act to possess a scanning
4device with the intent to use such device to obtain information
5encoded on a payment card without permission from the
6authorized user of the payment card, the issuer of such card,
7or a merchant, or to possess a scanning device with knowledge
8that another person intends to use the device to obtain
9information encoded on a payment card without permission from
10the authorized user of the payment card, the issuer of such
11card, or a merchant.
12A person who commits a violation of Code section 715A.10
13commits a class “D” felony. A class “D” felony is punishable
14by confinement for no more than five years and a fine of at
15least $750 but not more than $7,500. A second or subsequent
16violation of Code section 715A.10 is a class “C” felony. A
17class “C” felony is punishable by confinement for no more
18than 10 years and a fine of at least $1,000 but not more than
19$10,000.
20Current law defines “criminal mischief” as the intentional
21damage, defacement, alteration, or destruction of property
22by a person who has no right to do so. The bill provides
23that a person commits criminal mischief in the third degree
24if the act is committed upon real or personal property that
25has the ability to process a payment card as defined in Code
26section 715A.10. Criminal mischief in the third degree is
27an aggravated misdemeanor. An aggravated misdemeanor is
28punishable by confinement for no more than two years and a fine
29of at least $625 but not more than $6,250.
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2a scanning device or encoding machine and criminal mischief
3in the third degree, and providing penalties.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 715A.10, Code 2018, is amended to read
2as follows:
3715A.10 Illegal use of scanning device or reencoder encoding
4machine.
51. A person commits a class “D” felony if the person does
6any of the following:
7a. Uses Directly or indirectly uses a scanning device
8to access, read, obtain, memorize, or store, temporarily
9or permanently, information encoded on the magnetic strip
10or stripe of a payment card without the permission of the
11authorized user of the payment card, and with the intent to
12defraud the authorized user, the issuer of the authorized
13user’s payment card, or a merchant.
14b. Possesses a scanning device with the intent to use such
15device to obtain information encoded on a payment card without
16the permission of the authorized user of the payment card, the
17issuer of the authorized user’s payment card, or a merchant, or
18possesses a scanning device with knowledge that a person other
19than the authorized user, the issuer of the authorized user’s
20payment card, or a merchant intends to use the scanning device
21to obtain information encoded on a payment card without the
22permission of the authorized user, the issuer of the authorized
23user’s payment card, or a merchant.
24b. c. Uses a reencoder Directly or indirectly uses an
25encoding machine to place information encoded on the magnetic
26strip or stripe of a payment card onto the magnetic strip
27or stripe of a different payment card without the permission
28of the authorized user of the payment card from which the
29information is being reencoded was obtained, and with the
30intent to defraud the authorized user, the issuer of the
31authorized user’s payment card, or a merchant.
322. A second or subsequent violation of this section is a
33class “C” felony.
343. As used in this section:
35a. “Encoding machine” means an electronic device that is
-1-1used to encode information onto a payment card.
2a. b. “Merchant” means an owner or operator of a retail
3mercantile establishment or an agent, employee, lessee,
4consignee, officer, director, franchisee, or independent
5contractor of such owner or operator. A “merchant” also means
6 includes an establishing financial institution referred to
7in section 527.5, a person who receives from an authorized
8user of a payment card, or someone the person believes to
9be an authorized user, a payment card or information from a
10payment card, or what the person believes to be a payment card
11or information from a payment card, as the instrument for
12obtaining, purchasing, or receiving goods, services, money, or
13anything else of value from the person.
14b. c. “Payment card” means a credit card, charge card,
15debit card, access device as defined in section 527.2, or
16any other card that is issued to an authorized card user and
17that allows the user to obtain, purchase, or receive goods,
18services, money, or anything else of value from a merchant.
19c. “Reencoder” means an electronic device that places
20encoded information from the magnetic strip or stripe of a
21payment card onto the magnetic strip or stripe of a different
22payment card.
23d. “Scanning device” means a scanner, reader, wireless
24access device, radio frequency identification scanner, an
25electronic device that utilizes near field communications
26technology, or any other electronic device that is used to
27access, read, scan, obtain, memorize, or store, temporarily
28or permanently, information encoded on the magnetic strip or
29stripe of a payment card.
30 Sec. 2. Section 716.5, subsection 1, Code 2018, is amended
31by adding the following new paragraph:
32 NEW PARAGRAPH. f. The act is committed upon real or
33personal property that has the ability to process a payment
34card as defined in section 715A.10.
35EXPLANATION
-2-1The inclusion of this explanation does not constitute agreement with
2the explanation’s substance by the members of the general assembly.
3This bill modifies certain criminal acts that involve
4payment cards.
5Current Code section 715A.10 prohibits a person from
6using a scanning device to access information encoded on
7the magnetic strip or stripe of a payment card without the
8permission of the authorized user of the payment card, and with
9the intent to defraud the authorized user, the issuer of the
10authorized user’s payment card, or a merchant. A person is
11also prohibited from using a reencoder to place information
12encoded on the magnetic strip or stripe of a payment card
13onto the magnetic strip or stripe of another card without the
14permission of the authorized user of the card from which the
15information is being reencoded, and with the intent to defraud
16the authorized user, the issuer of the authorized user’s
17payment card, or a merchant.
18The bill makes several changes to terminology in Code
19section 715A.10. The bill replaces the term “reencoder” with
20“encoding machine”, defined as an electronic device that is
21used to encode information onto a payment card. The bill
22expands the definition of “merchant” to include an establishing
23financial institution as referred to in Code section 527.5.
24The bill expands the definition of “payment card” to include
25an access device as defined in Code section 527.2. The
26bill expands the definition of “scanning device” to include
27a wireless access device, radio frequency identification
28scanner, and an electronic device that utilizes near-field
29communications technology. The bill removes any references to
30the magnetic strip or stripes of payment cards in Code section
31715A.10.
32The bill broadens the prohibitions against using a scanning
33device or encoding machine to commit fraud by prohibiting the
34direct or indirect use of such a device or machine. The bill
35also removes the requirement that a person have intent to
-3-1defraud for the prohibitions against using a scanning device or
2encoding machine to commit fraud.
3The bill makes it a criminal act to possess a scanning
4device with the intent to use such device to obtain information
5encoded on a payment card without permission from the
6authorized user of the payment card, the issuer of such card,
7or a merchant, or to possess a scanning device with knowledge
8that another person intends to use the device to obtain
9information encoded on a payment card without permission from
10the authorized user of the payment card, the issuer of such
11card, or a merchant.
12A person who commits a violation of Code section 715A.10
13commits a class “D” felony. A class “D” felony is punishable
14by confinement for no more than five years and a fine of at
15least $750 but not more than $7,500. A second or subsequent
16violation of Code section 715A.10 is a class “C” felony. A
17class “C” felony is punishable by confinement for no more
18than 10 years and a fine of at least $1,000 but not more than
19$10,000.
20Current law defines “criminal mischief” as the intentional
21damage, defacement, alteration, or destruction of property
22by a person who has no right to do so. The bill provides
23that a person commits criminal mischief in the third degree
24if the act is committed upon real or personal property that
25has the ability to process a payment card as defined in Code
26section 715A.10. Criminal mischief in the third degree is
27an aggravated misdemeanor. An aggravated misdemeanor is
28punishable by confinement for no more than two years and a fine
29of at least $625 but not more than $6,250.
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