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McKeon Bill to Better Protect Consumers in Electronic Transactions Clears Assembly Panel
(TRENTON) - Aiming to ensure police are able to better investigate and prosecute wrongful electronic payments between two parties, legislation sponsored by Assemblyman John McKeon to require receivers to return electronic payment to senders in the case of person-to-person electronic transactions was approved on Monday by the Assembly Financial Institutions and Insurance Committee.
"When making a payment, it's becoming increasing common for people to reach for their cell phone rather than their wallet or checkbook," said McKeon (D-Essex, Morris). "It's incredibly easy to buy items from online sellers, pay a friend back for lunch, or move money from one bank account to another, all at the touch of a smartphone or computer. But not all electronic transactions are accurate or just. This bill will help consumers exchanging money with another person feel assured that the receiver will be held accountable should the transaction go wrong."
The bill (A-4827) would provide that failure to return an erroneous person-to-person electronic payment to the sender is theft. If a person receives an electronic payment from another individual through a payment processor that was delivered as a mistake as to the nature, amount of the transfer or identity of the recipient, failure to return the payment to the sender constitutes theft in which the recipient was notified that the payment was erroneous.
"It's been difficult for law enforcement to recover mistaken electronic payments without a specific law in place," said McKeon. "As the way we exchange money and goods changes, we need to update our law accordingly to ensure consumers are protected and wrongdoing can be prosecuted."
Additionally, the measure adds a definition of "payment processor" to the chapter on theft offenses.
The bill heads to the Assembly Speaker for further consideration.
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