(a) No person shall process, deposit, negotiate, or obtain payment of a credit card charge through a retailer‘s account with a financial institution or through a retailer’s agreement with a financial institution, card issuer, or organization of financial institutions or card issuers if that retailer did not furnish or agree to furnish the goods or services which are the subject of the charge.

(b) No retailer shall permit any person to process, deposit, negotiate, or obtain payment of a credit card charge through the retailer’s account with a financial institution or the retailer’s agreement with a financial institution, card issuer, or organization of financial institutions or card issuers if that retailer did not furnish or agree to furnish the goods or services which are the subject of the charge.

Terms Used In California Civil Code 1748.7

  • Card issuer: means any person who issues a credit card or the agent of that person for that purpose with respect to the credit card. See California Civil Code 1747.02
  • Cardholder: means a natural person to whom a credit card is issued for consumer credit purposes, or a natural person who has agreed with the card issuer to pay consumer credit obligations arising from the issuance of a credit card to another natural person. See California Civil Code 1747.02
  • Credit card: means any card, plate, coupon book, or other single credit device existing for the purpose of being used from time to time upon presentation to obtain money, property, labor, or services on credit. See California Civil Code 1747.02
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Retailer: means every person other than a card issuer who furnishes money, goods, services, or anything else of value upon presentation of a credit card by a cardholder. See California Civil Code 1747.02

(c)  Subdivisions (a) and (b) do not apply to any of the following:

(1) A person who furnishes goods or services on the business premises of a general merchandise retailer and who processes, deposits, negotiates, or obtains payment of a credit card charge through that general merchandise retailer’s account or agreement.

(2) A general merchandise retailer who permits a person described in paragraph (1) to process, deposit, negotiate, or obtain payment of a credit card charge through that general merchandise retailer’s account or agreement.

(3) A franchisee who furnishes the cardholder with goods or services that are provided in whole or in part by the franchisor and who processes, deposits, negotiates, or obtains payment of a credit card charge through that franchisor’s account or agreement.

(4) A franchisor who permits a franchisee described in paragraph (3) to process, deposit, negotiate, or obtain payment of a credit card charge through that franchisor’s account or agreement.

(5) The credit card issuer or a financial institution or a parent, subsidiary, or affiliate of the card issuer or a financial institution.

(6) A person who processes, deposits, negotiates, or obtains payment of less than five hundred dollars ($500) of credit card charges in any one year period through a retailer’s account or agreement. The person shall have the burden of producing evidence that the person transacted less than five hundred dollars ($500) in credit card charges during any one year period.

(d) Any person injured by a violation of this section may bring an action for the recovery of damages, equitable relief, and reasonable attorney’s fees and costs.

(e) Any person who violates this section shall be guilty of a misdemeanor. Each occurrence in which a person processes, deposits, negotiates, or otherwise seeks to obtain payment of a credit card charge in violation of subdivision (a) constitutes a separate offense.

(f) The penalties and remedies provided in this section are in addition to any other remedies or penalties provided by law.

(g) The exemptions from this title specified in Section 1747.03 do not apply to this section.

(h) As used in this section:

(1) “General merchandise retailer” means any person or entity, regardless of the form of organization, that has continuously offered for sale or lease more than 100 different types of goods or services to the public in this state throughout a period which includes the immediately preceding five years.

(2) “Franchisor” has the same meaning as defined in § 31007 of the Corporations Code.

(3) “Franchisee” has the same meaning as defined in § 31006 of the Corporations Code.

(Added by Stats. 1989, Ch. 855, Sec. 1.)

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