Bill Text: MN HF343 | 2011-2012 | 87th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Money transmitters regulated, and cooperation required in combating fraud.
Spectrum: Slight Partisan Bill (Democrat 7-3)
Status: (Introduced - Dead) 2012-03-05 - Second reading [HF343 Detail]
Download: Minnesota-2011-HF343-Introduced.html
Bill Title: Money transmitters regulated, and cooperation required in combating fraud.
Spectrum: Slight Partisan Bill (Democrat 7-3)
Status: (Introduced - Dead) 2012-03-05 - Second reading [HF343 Detail]
Download: Minnesota-2011-HF343-Introduced.html
1.2relating to crime; enhancing enforcement capability for identity theft and other
1.3fraudulent activities conducted electronically;amending Minnesota Statutes
1.42010, sections 53B.18; 299L.01; proposing coding for new law in Minnesota
1.5Statutes, chapter 299L.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 53B.18, is amended to read:
1.853B.18 PROHIBITED PRACTICES.
1.9No licensee shall:
1.10(1) fail to comply with chapter 345 as it relates to unclaimed property requirements;
1.11(2) refuse to indemnify an instrument holder for any misappropriation of money
1.12caused by any of its authorized delegates in conducting activities on behalf of the licensee
1.13for whom it acts as an authorized delegate;or
1.14(3) fail to transmit all money received for wire transmission in accordance with the
1.15purchaser's instructions within five days; or
1.16(4) fail to comply with section 299L.11.
1.17 Sec. 2. Minnesota Statutes 2010, section 299L.01, is amended to read:
1.18299L.01 DIVISION OF ALCOHOLAND, GAMBLING, AND ELECTRONIC
1.19FRAUD ENFORCEMENT.
1.20 Subdivision 1. Definitions. (a) For the purposes of this chapter, the terms defined in
1.21this subdivision have the meanings given them.
1.22(b) "Division" means the Division of Alcoholand, Gambling, and Electronic Fraud
1.23Enforcement.
2.1(c) "Commissioner" means the commissioner of public safety.
2.2(d) "Director" means the director of alcoholand, gambling, and electronic fraud
2.3enforcement.
2.4(e) "Manufacturer" means a person who assembles from raw materials or subparts a
2.5gambling device for sale or use in Minnesota.
2.6(f) "Distributor" means a person who sells, offers to sell, or otherwise provides a
2.7gambling device to a person in Minnesota.
2.8(g) "Used gambling device" means a gambling device five or more years old from
2.9the date of manufacture.
2.10(h) "Test" means the process of examining a gambling device to determine its
2.11characteristics or compliance with the established requirements of any jurisdiction.
2.12(i) "Testing facility" means a person in Minnesota who is engaged in the testing of
2.13gambling devices for use in any jurisdiction.
2.14 Subd. 2. Established; consolidation with liquor control. Effective October 1,
2.151996, the duties and powers of the Division of Gambling Enforcement are transferred
2.16to the Division of Alcoholand, Gambling, and Electronic Fraud Enforcement in the
2.17Department of Public Safety, under the control and supervision of a director appointed by
2.18the commissioner and serving at the commissioner's pleasure in the unclassified service.
2.19The director must be a person who is licensed or eligible to be licensed as a peace officer
2.20under sections626.84 to
626.863 .
2.21 Subd. 3. Employees. The director shall employ in the Division of Alcohol
2.22and, Gambling, and Electronic Fraud Enforcement personnel, in the classified service,
2.23necessary to carry out the duties under this chapter. The director shall request the Bureau
2.24of Criminal Apprehension to perform background checks on persons who are finalists for
2.25employment with the division but may employ personnel pending completion of the
2.26background check.
2.27 Subd. 4. Conflict of interest. (a) The director and any person employed by the
2.28division may not have a direct or indirect financial interest in:
2.29(1) a class A or B licensee of the Racing Commission;
2.30(2) a lottery retailer under contract with the State Lottery;
2.31(3) a person who is under a lottery procurement contract with the State Lottery;
2.32(4) a bingo hall, manufacturer, or distributor licensed under chapter 349; or
2.33(5) a manufacturer or distributor licensed under this chapter.
2.34(b) The director or an employee of the Division of Alcoholand, Gambling, and
2.35Electronic Fraud Enforcement may not participate in the conducting of lawful gambling
2.36under chapter 349.
3.1 Sec. 3. [299L.10] ADMINISTRATIVE SUBPOENA TO OBTAIN
3.2TELECOMMUNICATIONS ACCOUNT INFORMATION.
3.3 Subdivision 1. Definition; telecommunication provider. For purposes of this
3.4section, "telecommunication provider" means an individual or entity that provides an
3.5e-mail account, Internet access, Web hosting, cell phone service, or landline telephone
3.6services to a Minnesota resident at a Minnesota location.
3.7 Subd. 2. Administrative subpoena. The director of the Division of Alcohol,
3.8Gambling, and Electronic Fraud Enforcement may serve upon the Public Utilities
3.9Commission or a telecommunications provider an administrative subpoena to obtain
3.10account information with regard to an e-mail account, cell phone or other telephone
3.11number, Internet access account, Web site, or other means of electronic communication, if
3.12the director has determined that the account information may be helpful in an investigation
3.13of suspected identity theft or other fraudulent activity conducted in whole or in part by
3.14electronic means.
3.15 Subd. 3. Response of recipient of administrative subpoena. The recipient of an
3.16administrative subpoena described in subdivision 2 shall respond with the requested
3.17information no later than five business days after receipt of the subpoena. If the recipient
3.18cannot comply with any aspect of the administrative subpoena, the recipient shall provide
3.19a written explanation of the reason, including any necessary explanation of why the
3.20recipient needs additional time to comply, stating the time by which the recipient expects
3.21to be able to comply.
3.22 Subd. 4. E-mail account information. An entity that provides e-mail services to a
3.23Minnesota resident must comply with an administrative subpoena that directs the entity
3.24to provide to the director any or all customer account information, account activity logs,
3.25and all content sent from or received by an e-mail account that may have been used in
3.26an attempt to defraud a Minnesota resident. The entity served with the administrative
3.27subpoena under this section must comply with subdivision 3.
3.28 Subd. 5. Suspension or termination of account; liability for noncompliance. (a)
3.29An Internet service provider, Web-hosting company, money transmitter, or e-mail services
3.30provider that provides any of those services to a Minnesota resident shall immediately
3.31suspend or terminate an account upon notice to the provider by the director that a specified
3.32account is being used for fraudulent activity.
3.33(b) If the service provider does not comply with paragraph (a), the service provider
3.34is liable to a victim for any financial loss subsequently incurred as a result of the provider's
3.35failure to comply with this subdivision plus a civil penalty of up to that amount depending
3.36upon the culpability of the service provider's failure to comply with this subdivision.
4.1 Subd. 6. Blocking international calls; request of customer. (a) A
4.2telecommunications service provider providing telecommunications services to a
4.3Minnesota resident shall, at the request of the customer, block international calls made
4.4from an area code or a telephone number tied to a physical location in a country other
4.5than the United States of America, including international calls that the telephone service
4.6provider can identify as international calls even though the calls arrive with a purported
4.7area code designation that makes the call appear to have originated within the United
4.8States of America or from a foreign country other than the country indicated by the caller's
4.9purported area code.
4.10(b) A telecommunications service provider shall fully verify caller ID information
4.11related to a call and report the result within 24 hours of receipt of an administrative
4.12subpoena ordering the telecommunications service provider to do so.
4.13 Sec. 4. [299L.11] MONEY TRANSMITTERS; COOPERATION REQUIRED
4.14IN COMBATTING FRAUD.
4.15 Subdivision 1. Definition; money transmitter. For purposes of this section,
4.16"money transmitter," "entity that originates money transfers," or similar terms mean all
4.17entities licensed, or required to be licensed under chapter 53B.
4.18 Subd. 2. Antifraud program required. Each money transmitter must establish
4.19and maintain an effective antifraud program that includes background investigations of
4.20authorized agents and their employees. The program must be approved and reviewed as
4.21appropriate by the director.
4.22 Subd. 3. Designation of specific recipient required. (a) A money transmitter doing
4.23business in this state must, for all money transfers in excess of $100, excluding taxes
4.24and fees, designate the transaction as being sent to a specified individual for receipt at a
4.25specified location, as specified by the sender and not by the money transmitter.
4.26(b) To collect the funds, the designated recipient must be required to (1) show
4.27a government-issued photo identification card which matches the name specified by
4.28the sender; and (2) be present at the location specified by the sender. If either of these
4.29requirements is not met, the money transmitter must suspend the transfer and notify the
4.30sender of the discrepancy. The transfer may then be completed only with the actual
4.31written consent of the sender.
4.32 Subd. 4. Question required regarding possible fraud. Any company originating
4.33a money transfer in this state must first ask the customer if the customer believes that
4.34initiation of the transfer is related to fraudulent activity. If the customer responds that the
4.35customer believes that the transfer is related to fraudulent activity, the company must
5.1suspend the transfer and promptly submit a Suspicious Activity Report to the director and
5.2cooperate fully in any resulting investigation.
5.3 Subd. 5. Reporting fraudulent transactions. Any entity that originates money
5.4transfers in this state that becomes aware of a fraudulent transaction that involves a money
5.5transfer must immediately report the transaction to the director, including the amount of
5.6the transfer, the person to whom it was sent, and the location to which it was sent, to the
5.7extent that the information is known to the entity submitting the report.
5.8 Subd. 6. Voluntary disqualification by customer. A money transmitter that
5.9originates money transfers in this state must allow an individual to voluntarily disqualify
5.10the individual from sending or receiving money transfers. The disqualification lasts for
5.11one year, unless the individual requests that it be in effect for an initial period longer than
5.12one year. The individual may terminate the disqualification at any time upon written
5.13notice to the money transmitter.
5.14 Subd. 7. Enforcement. The director may request the commissioner of commerce to
5.15enforce this section under sections 45.027 and 53B.24. The director and the commissioner
5.16of commerce may agree on a schedule of financial penalties for routine violations of
5.17this section.
5.18 Subd. 8. Surcharge; funding for enforcement. (a) A money transmitter shall pay a
5.19fraud protection fee in the amount of $5 on each money transfer originated in this state
5.20and submit the fees for each month no later than the tenth day of the following month to
5.21the commissioner of public safety.
5.22(b) The commissioner of public safety shall deposit the fees in an account in the
5.23special revenue fund. The amount in the account is appropriated to the commissioner
5.24of public safety for purposes of enforcement activities related to this section and to
5.25fraudulent activities reported under it.
1.3fraudulent activities conducted electronically;amending Minnesota Statutes
1.42010, sections 53B.18; 299L.01; proposing coding for new law in Minnesota
1.5Statutes, chapter 299L.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 53B.18, is amended to read:
1.853B.18 PROHIBITED PRACTICES.
1.9No licensee shall:
1.10(1) fail to comply with chapter 345 as it relates to unclaimed property requirements;
1.11(2) refuse to indemnify an instrument holder for any misappropriation of money
1.12caused by any of its authorized delegates in conducting activities on behalf of the licensee
1.13for whom it acts as an authorized delegate;
1.14(3) fail to transmit all money received for wire transmission in accordance with the
1.15purchaser's instructions within five days; or
1.16(4) fail to comply with section 299L.11.
1.17 Sec. 2. Minnesota Statutes 2010, section 299L.01, is amended to read:
1.18299L.01 DIVISION OF ALCOHOL
1.19FRAUD ENFORCEMENT.
1.20 Subdivision 1. Definitions. (a) For the purposes of this chapter, the terms defined in
1.21this subdivision have the meanings given them.
1.22(b) "Division" means the Division of Alcohol
1.23Enforcement.
2.1(c) "Commissioner" means the commissioner of public safety.
2.2(d) "Director" means the director of alcohol
2.3enforcement.
2.4(e) "Manufacturer" means a person who assembles from raw materials or subparts a
2.5gambling device for sale or use in Minnesota.
2.6(f) "Distributor" means a person who sells, offers to sell, or otherwise provides a
2.7gambling device to a person in Minnesota.
2.8(g) "Used gambling device" means a gambling device five or more years old from
2.9the date of manufacture.
2.10(h) "Test" means the process of examining a gambling device to determine its
2.11characteristics or compliance with the established requirements of any jurisdiction.
2.12(i) "Testing facility" means a person in Minnesota who is engaged in the testing of
2.13gambling devices for use in any jurisdiction.
2.14 Subd. 2. Established; consolidation with liquor control. Effective October 1,
2.151996, the duties and powers of the Division of Gambling Enforcement are transferred
2.16to the Division of Alcohol
2.17Department of Public Safety, under the control and supervision of a director appointed by
2.18the commissioner and serving at the commissioner's pleasure in the unclassified service.
2.19The director must be a person who is licensed or eligible to be licensed as a peace officer
2.20under sections
2.21 Subd. 3. Employees. The director shall employ in the Division of Alcohol
2.22
2.23necessary to carry out the duties under this chapter. The director shall request the Bureau
2.24of Criminal Apprehension to perform background checks on persons who are finalists for
2.25employment with the division but may employ personnel pending completion of the
2.26background check.
2.27 Subd. 4. Conflict of interest. (a) The director and any person employed by the
2.28division may not have a direct or indirect financial interest in:
2.29(1) a class A or B licensee of the Racing Commission;
2.30(2) a lottery retailer under contract with the State Lottery;
2.31(3) a person who is under a lottery procurement contract with the State Lottery;
2.32(4) a bingo hall, manufacturer, or distributor licensed under chapter 349; or
2.33(5) a manufacturer or distributor licensed under this chapter.
2.34(b) The director or an employee of the Division of Alcohol
2.35Electronic Fraud Enforcement may not participate in the conducting of lawful gambling
2.36under chapter 349.
3.1 Sec. 3. [299L.10] ADMINISTRATIVE SUBPOENA TO OBTAIN
3.2TELECOMMUNICATIONS ACCOUNT INFORMATION.
3.3 Subdivision 1. Definition; telecommunication provider. For purposes of this
3.4section, "telecommunication provider" means an individual or entity that provides an
3.5e-mail account, Internet access, Web hosting, cell phone service, or landline telephone
3.6services to a Minnesota resident at a Minnesota location.
3.7 Subd. 2. Administrative subpoena. The director of the Division of Alcohol,
3.8Gambling, and Electronic Fraud Enforcement may serve upon the Public Utilities
3.9Commission or a telecommunications provider an administrative subpoena to obtain
3.10account information with regard to an e-mail account, cell phone or other telephone
3.11number, Internet access account, Web site, or other means of electronic communication, if
3.12the director has determined that the account information may be helpful in an investigation
3.13of suspected identity theft or other fraudulent activity conducted in whole or in part by
3.14electronic means.
3.15 Subd. 3. Response of recipient of administrative subpoena. The recipient of an
3.16administrative subpoena described in subdivision 2 shall respond with the requested
3.17information no later than five business days after receipt of the subpoena. If the recipient
3.18cannot comply with any aspect of the administrative subpoena, the recipient shall provide
3.19a written explanation of the reason, including any necessary explanation of why the
3.20recipient needs additional time to comply, stating the time by which the recipient expects
3.21to be able to comply.
3.22 Subd. 4. E-mail account information. An entity that provides e-mail services to a
3.23Minnesota resident must comply with an administrative subpoena that directs the entity
3.24to provide to the director any or all customer account information, account activity logs,
3.25and all content sent from or received by an e-mail account that may have been used in
3.26an attempt to defraud a Minnesota resident. The entity served with the administrative
3.27subpoena under this section must comply with subdivision 3.
3.28 Subd. 5. Suspension or termination of account; liability for noncompliance. (a)
3.29An Internet service provider, Web-hosting company, money transmitter, or e-mail services
3.30provider that provides any of those services to a Minnesota resident shall immediately
3.31suspend or terminate an account upon notice to the provider by the director that a specified
3.32account is being used for fraudulent activity.
3.33(b) If the service provider does not comply with paragraph (a), the service provider
3.34is liable to a victim for any financial loss subsequently incurred as a result of the provider's
3.35failure to comply with this subdivision plus a civil penalty of up to that amount depending
3.36upon the culpability of the service provider's failure to comply with this subdivision.
4.1 Subd. 6. Blocking international calls; request of customer. (a) A
4.2telecommunications service provider providing telecommunications services to a
4.3Minnesota resident shall, at the request of the customer, block international calls made
4.4from an area code or a telephone number tied to a physical location in a country other
4.5than the United States of America, including international calls that the telephone service
4.6provider can identify as international calls even though the calls arrive with a purported
4.7area code designation that makes the call appear to have originated within the United
4.8States of America or from a foreign country other than the country indicated by the caller's
4.9purported area code.
4.10(b) A telecommunications service provider shall fully verify caller ID information
4.11related to a call and report the result within 24 hours of receipt of an administrative
4.12subpoena ordering the telecommunications service provider to do so.
4.13 Sec. 4. [299L.11] MONEY TRANSMITTERS; COOPERATION REQUIRED
4.14IN COMBATTING FRAUD.
4.15 Subdivision 1. Definition; money transmitter. For purposes of this section,
4.16"money transmitter," "entity that originates money transfers," or similar terms mean all
4.17entities licensed, or required to be licensed under chapter 53B.
4.18 Subd. 2. Antifraud program required. Each money transmitter must establish
4.19and maintain an effective antifraud program that includes background investigations of
4.20authorized agents and their employees. The program must be approved and reviewed as
4.21appropriate by the director.
4.22 Subd. 3. Designation of specific recipient required. (a) A money transmitter doing
4.23business in this state must, for all money transfers in excess of $100, excluding taxes
4.24and fees, designate the transaction as being sent to a specified individual for receipt at a
4.25specified location, as specified by the sender and not by the money transmitter.
4.26(b) To collect the funds, the designated recipient must be required to (1) show
4.27a government-issued photo identification card which matches the name specified by
4.28the sender; and (2) be present at the location specified by the sender. If either of these
4.29requirements is not met, the money transmitter must suspend the transfer and notify the
4.30sender of the discrepancy. The transfer may then be completed only with the actual
4.31written consent of the sender.
4.32 Subd. 4. Question required regarding possible fraud. Any company originating
4.33a money transfer in this state must first ask the customer if the customer believes that
4.34initiation of the transfer is related to fraudulent activity. If the customer responds that the
4.35customer believes that the transfer is related to fraudulent activity, the company must
5.1suspend the transfer and promptly submit a Suspicious Activity Report to the director and
5.2cooperate fully in any resulting investigation.
5.3 Subd. 5. Reporting fraudulent transactions. Any entity that originates money
5.4transfers in this state that becomes aware of a fraudulent transaction that involves a money
5.5transfer must immediately report the transaction to the director, including the amount of
5.6the transfer, the person to whom it was sent, and the location to which it was sent, to the
5.7extent that the information is known to the entity submitting the report.
5.8 Subd. 6. Voluntary disqualification by customer. A money transmitter that
5.9originates money transfers in this state must allow an individual to voluntarily disqualify
5.10the individual from sending or receiving money transfers. The disqualification lasts for
5.11one year, unless the individual requests that it be in effect for an initial period longer than
5.12one year. The individual may terminate the disqualification at any time upon written
5.13notice to the money transmitter.
5.14 Subd. 7. Enforcement. The director may request the commissioner of commerce to
5.15enforce this section under sections 45.027 and 53B.24. The director and the commissioner
5.16of commerce may agree on a schedule of financial penalties for routine violations of
5.17this section.
5.18 Subd. 8. Surcharge; funding for enforcement. (a) A money transmitter shall pay a
5.19fraud protection fee in the amount of $5 on each money transfer originated in this state
5.20and submit the fees for each month no later than the tenth day of the following month to
5.21the commissioner of public safety.
5.22(b) The commissioner of public safety shall deposit the fees in an account in the
5.23special revenue fund. The amount in the account is appropriated to the commissioner
5.24of public safety for purposes of enforcement activities related to this section and to
5.25fraudulent activities reported under it.
