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ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
AMENDED
revenue
department; technical correction
(NOW: money transmission; notice)
Purpose
Requires a licensee that engages in the business of receiving money for transmission on behalf of consumers for personal, family or household purposes to provide consumer fraud warnings as outlined.
Background
The Department of Insurance and Financial Institutes (DIFI) governs management of money transmission licensure and regulations. Money transmission is the act of: 1) selling or issuing payment instruments to a person located in Arizona; 2) selling or issuing stored value to a person located in Arizona; or 3) receiving money for transmission from a person located in Arizona. Money transmission does not include the act of providing solely online telecommunications services or network access (A.R.S. § 6-1201).
The Attorney General (AG) enforces the Consumer Fraud Act (Act) by investigating consumer complaints, filing enforcement actions against persons who have violated the Act and providing consumer fraud education programs intended to rectify violations or alleged violations of the Act. In an enforcement action, the AG may obtain from a person found in violation of the Act civil penalties, restitution payments and court orders to prevent the person from continuing the fraud (A.R.S. §§ 44-1524; 44-1527; 44-1530; and 44-1531.02).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires a licensee that engages in the business of receiving money for transmission on behalf of consumers for personal, family or household purposes to provide consumer fraud warnings that include:
a) the risks of consumer fraud and how to find additional information about consumer fraud regarding money transmission;
b) information about the dangers of transmitting money to unknown persons or to persons whom the sender cannot verify;
c) information about how to stop a money transmission, if an option is available; and
d) information that warns the sender that monies may not be returned once the money transmission is complete.
2. Requires the licensee to provide a consumer with the consumer fraud warnings before transmitting any money by either of the following methods:
a) in person, in a document or other materials provided directly to the consumer or by displaying the warnings prominently in the location in which the licensee or an authorized delegate of the licensee engages in receiving money for transmission; or
b) through electronic transmission.
3. Requires the consumer fraud warnings to be in a type that contrasts with the background against which the written warning appears.
4. Specifies that the consumer fraud warning requirements do not apply to:
a) an
electronic funds transfer where monies are not transferred directly to another
person and are not available for immediate use;
b) an electronic funds transfer that is made with a gift certificate; or
c) a licensee that can demonstrate they provide or require their authorized delegate to provide annual fraud prevention training to employees that covers the indicia of fraud associated with electronic money transfers.
5. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Adopted the strike-everything amendment.
Amendments Adopted by Committee of the Whole
2. Removes the font size requirement for consumer fraud warnings displayed in a place of business or in an electronic notice.
3. Removes the $250 civil penalty per disclosure violation.
4. Makes technical and conforming changes.
Amendments Adopted by the House of Representatives
1. Specifies the consumer fraud warning requirements apply to licensees that engage in the business of receiving money for transmission on behalf of consumers for personal, family or household purposes, rather than persons who engage in the business of money transmission.
2. Requires consumer fraud warnings to be provided to consumers, rather than clearly and prominently displayed.
3. Exempts, from the consumer fraud warning requirements, licensees that can demonstrate they provide or require their authorized delegate to provide annual fraud prevention training to employees that covers the indicia of fraud associated with electronic money transfers.
Senate Action House Action
FICO 2/12/24 DPA/SE 7-0-0 COM 3/12/24 DPA 9-0-0-1
3rd Read 2/29/24 26-0-4 3rd Read 4/1/24 48-0-11-0-1
Prepared by Senate Research
April 1, 2024
MG/AB/cs