Part 3. Obligations Imposed by Law - California Civil Code Section 1725

1725.  (a) Unless permitted under subdivision (c), no person
accepting a negotiable instrument as payment in full or in part for
goods or services sold or leased at retail shall do any of the
   (1) Require the person paying with a negotiable instrument to
provide a credit card as a condition of acceptance of the negotiable
instrument, or record the number of the credit card.
   (2) Require, as a condition of acceptance of the negotiable
instrument, or cause the person paying with a negotiable instrument
to sign a statement agreeing to allow his or her credit card to be
charged to cover the negotiable instrument if returned as no good.
   (3) Record a credit card number in connection with any part of the
transaction described in this subdivision.
   (4) Contact a credit card issuer to determine if the amount of any
credit available to the person paying with a negotiable instrument
will cover the amount of the negotiable instrument.
   (b) For the purposes of this section, the following terms have the
following meanings:
   (1) "Check guarantee card" means a card issued by a financial
institution, evidencing an agreement under which the financial
institution will not dishonor a check drawn upon itself, under the
terms and conditions of the agreement.
   (2) "Credit card" has the meaning specified in Section 1747.02,
and does not include a check guarantee card or a card that is both a
credit card and a check guarantee card.
   (3) "Negotiable instrument" has the meaning specified in Section
3104 of the Commercial Code.
   (4) "Retail" means a transaction involving the sale or lease of
goods or services or both, between an individual, corporation, or
other entity regularly engaged in business and a consumer, for use by
the consumer and not for resale.
   (c) This section does not prohibit any person from doing any of
the following:
   (1) Requiring the production of reasonable forms of positive
identification, other than a credit card, which may include a driver'
s license or a California state identification card, or where one of
these is not available, another form of photo identification, as a
condition of acceptance of a negotiable instrument.
   (2) Requesting, but not requiring, a purchaser to voluntarily
display a credit card as an indicia of creditworthiness or financial
responsibility, or as an additional identification, provided the only
information concerning the credit card which is recorded is the type
of credit card displayed, the issuer of the card, and the expiration
date of the card. All retailers that request the display of a credit
card pursuant to this paragraph shall inform the customer, by either
of the following methods, that displaying the credit card is not a
requirement for check writing:
   (A) By posting the following notice in a conspicuous location in
the unobstructed view of the public within the premises where the
check is being written, clearly and legibly: "Check writing ID:
credit card may be requested but not required for purchases."
   (B) By training and requiring the sales clerks or retail employees
requesting the credit card to inform all check writing customers
that they are not required to display a credit card to write a check.
   (3) Requesting production of, or recording, a credit card number
as a condition for cashing a negotiable instrument that is being used
solely to receive cash back from the person.
   (4) Requesting, receiving, or recording a credit card number in
lieu of requiring a deposit to secure payment in event of default,
loss, damage, or other occurrence.
   (5) Requiring, verifying, and recording the purchaser's name,
address, and telephone number.
   (6) Requesting or recording a credit card number on a negotiable
instrument used to make a payment on that credit card account.
   (d) This section does not require acceptance of a negotiable
instrument whether or not a credit card is presented.
   (e) Any person who violates this section is subject to a civil
penalty not to exceed two hundred fifty dollars ($250) for a first
violation, and to a civil penalty not to exceed one thousand dollars
($1,000) for a second or subsequent violation, to be assessed and
collected in a civil action brought by the person paying with a
negotiable instrument, by the Attorney General, or by the district
attorney or city attorney of the county or city in which the
violation occurred. However, no civil penalty shall be assessed for a
violation of this section if the defendant shows by a preponderance
of the evidence that the violation was not intentional and resulted
from a bona fide error made notwithstanding the defendant's
maintenance of procedures reasonably adopted to avoid such an error.
When collected, the civil penalty shall be payable, as appropriate,
to the person paying with a negotiable instrument who brought the
action or to the general fund of whichever governmental entity
brought the action to assess the civil penalty.
   (f) The Attorney General, or any district attorney or city
attorney within his or her respective jurisdiction, may bring an
action in the superior court in the name of the people of the State
of California to enjoin violation of subdivision (a) and, upon notice
to the defendant of not less than five days, to temporarily restrain
and enjoin the violation. If it appears to the satisfaction of the
court that the defendant has, in fact, violated subdivision (a), the
court may issue an injunction restraining further violations, without
requiring proof that any person has been damaged by the violation.
In these proceedings, if the court finds that the defendant has
violated subdivision (a), the court may direct the defendant to pay
any or all costs incurred by the Attorney General, district attorney,
or city attorney in seeking or obtaining injunctive relief pursuant
to this subdivision.
   (g) Actions for collection of civil penalties under subdivision
(e) and for injunctive relief under subdivision (f) may be

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Last modified: February 16, 2015