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TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 19 TO TITLE 37 SO AS TO ENACT "THE AUTOMATIC PAYMENT PROTECTION ACT", REQUIRING CONSPICUOUS DISCLOSURE BY A BANK TO ITS CUSTOMER AND BY A VENDOR TO ITS BUYER OF THE PROCEDURE THE CUSTOMER OR BUYER SHALL FOLLOW TO TERMINATE AN AUTOMATIC PAYMENT AUTHORIZATION AGREEMENT AND TO STOP AUTOMATIC PAYMENTS FROM BEING CHARGED AGAINST THE CUSTOMER'S ACCOUNT OR BUYER'S CREDIT CARD, AND TO PROVIDE FOR DEFINITIONS AND DAMAGES, INCLUDING ATTORNEY'S FEES AND COURT COSTS.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 37 of the 1976 Code is amended by adding:
Section 37-19-110. This chapter may be cited as the 'Automatic Payment Protection Act'.
Section 37-19-120. For purposes of this chapter:
(1) 'Automatic payment' means the payment of a recurring bill charged to a bank account or a credit card pursuant to an agreement between the bank's customer and the bank or the buyer who is the credit card holder and the vendor; also, 'automated deduction', 'automated payment', 'automated debit', 'direct payment';
(2) 'Bank' has the same meaning as in Section 34-1-10;
(3) 'Credit card' has the same meaning as in Section 103 of the Truth in Lending Act, 15 U.S.C. Section 160, and includes a lender credit card as defined in Section 37-1-301(16) and a seller credit card as defined in Section 37-1-301(26);
(4) 'Debit card' means a card or device issued by a bank to a customer for use in initiating an electronic fund transfer from the account holding assets of the customer at that bank for the purpose of transferring money between accounts or obtaining money, property, labor, goods, or services;
(5) 'Vendor' means the seller of the property, labor, goods, or services, which sale is the subject of an agreement initiating an automatic payment.
Section 37-19-130. (A) It is unlawful for a bank to enter into an automatic payment authorization agreement with a customer to have a recurring bill paid directly through the customer's account or placed on the customer's debit card without conspicuously disclosing in writing and orally the procedure the customer is required to follow to terminate the agreement and stop the automatic payment.
(B) The disclosure required in subsection (A) must contain, at a minimum, the information that:
(1) a bank is required to stop making automated deductions from its customer's account or automated debits against its customer's debit card upon the customer's oral or written instruction at least three days before the payment is made;
(2) the subject bank requires the stop payment instructions in writing, if applicable;
(3) a bank is required to stop all future automatic payments once the automatic payment authorization is terminated;
(4) it is advisable for the customer also to notify the subject vendor directly of the stop payment instruction and termination of the automatic payment authorization agreement.
Section 39-19-140. (A) It is unlawful for a vendor to enter into an automatic payment authorization agreement with a buyer to have a recurring bill paid directly through a charge on a credit card or against the buyer's account in a bank without disclosing conspicuously in writing and orally the procedure the buyer is required to follow to terminate the agreement and to stop the automatic payments.
(B) The disclosure required in subsection (A) must contain, at a minimum, the information that:
(1) the buyer is required to notify the vendor in writing, at least one billing cycle in advance;
(2) after the following billing cycle, the vendor may not accept further payments made pursuant to the prior automatic payment authorization agreement;
(3) unless the credit card issuer is also the vendor, the credit card issuer does not have the power to terminate the agreement between the buyer and the vendor.
Section 37-19-150. (A) A bank or vendor that enters into an automatic payment authorization agreement with a customer or a buyer in violation of this chapter is liable to the customer or buyer for damages in an amount three times the pecuniary loss suffered by the customer or buyer by reason of the failure to terminate the agreement in a timely manner, as well as court costs and reasonable attorney's fees.
(B) This remedy is cumulative of and in addition to all other remedies at law or in equity and those available pursuant to this title."
SECTION 2. This act takes effect upon approval by the Governor.
This web page was last updated on Tuesday, June 23, 2009 at 2:41 P.M.