First Substitute H.B. 134

Representative A. Lamont Tyler proposes the following substitute bill:

1 UNAUTHORIZED ELECTRONIC
2 TRANSACTIONS
3 2002 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: A. Lamont Tyler
6 This act modifies the Uniform Commercial Code to create a penalty for certain unauthorized
7 electronic transactions.
8 This act affects sections of Utah Code Annotated 1953 as follows:
9 ENACTS:
10 70A-4-112, Utah Code Annotated 1953
11 Be it enacted by the Legislature of the state of Utah:
12 Section 1. Section 70A-4-112 is enacted to read:
13 70A-4-112. Liability for unauthorized electronic fund transfers.
14 (1) For purposes of this section:
15 (a) "unauthorized electronic transaction" means an electronic transfer of monies from an
16 account:
17 (i) initiated by a person other than the customer that maintains the account; and
18 (ii) without authority to initiate the transfer; and
19 (b) "unauthorized electronic transaction" does not include an electronic fund transfer:
20 (i) initiated with the fraudulent intent of the customer or a person acting with the
21 knowledge of the customer;
22 (ii) that is initiated by:
23 (A) a bank; or
24 (B) an employee of a bank; or
25 (iii) initiated in reliance on a written contract between the customer and the person that

26 initiates the transfer of the monies.
27 (2) A person may not request or receive monies through an unauthorized electronic
28 transaction.
29 (3) In addition to any other liability under this title, a person that violates Subsection (2):
30 (a) shall return to the customer:
31 (i) any monies transferred in violation of Subsection (2); and
32 (ii) any penalties imposed on the customer as a result of the unauthorized electronic
33 transaction; and
34 (b) is liable to the customer of the account from which the monies are transferred for an
35 amount equal to the greater of:
36 (i) $200; or
37 (ii) three times the amount requested to be transferred by the unauthorized electronic
38 transaction.
39 (4) (a) To collect an amount that a customer is owed under Subsection (3), the customer
40 may file a civil action in any court of competent jurisdiction.
41 (b) A court shall award the prevailing party in a civil action described in Subsection (4)(a):
42 (i) attorney fees, except that the attorneys fees may not exceed the amount described in
43 Subsection (3)(b); and
44 (ii) court costs.
45 (5) Notwithstanding Subsection (3)(b), a person is not liable under Subsection (3)(b) if that
46 person can demonstrate that:
47 (a) there was an authorization for the electronic transfer of funds that was requested by the
48 person;
49 (b) the electronic transfer of funds was inadvertently transferred from an account other
50 than the account for which there was an authorization; and
51 (c) promptly upon discovery of the inadvertent transfer, the person takes the actions
52 required by Subsection (3)(a).