Can I collect credit card information from participants in North Dakota? What are the requirements?

Yes, you may collect credit card information from participants in North Dakota under certain conditions.

Use of Credit Card Information

According to NDCC Section 51-14.1-04, a person may record a credit card number as a condition for cashing or accepting a check or other draft when that person has agreed with the card issuer to cash or accept checks or other drafts from the issuer’s cardholders and the issuer guarantees cardholder checks or other drafts cashed or accepted by that person. Therefore, if you have an agreement with the credit card issuer and they guarantee the checks or drafts, you may collect credit card information as a condition for cashing or accepting a check or other draft.

However, it is important to note that under NDCC Section 51-14.1-03, a person may not require, as a condition of acceptance of a check or other draft, that the person presenting the check provide a credit card number; nor may the person accepting the check or other draft record the credit card number. A person may request the person presenting the check to display a credit card as evidence of creditworthiness or as additional identification; however, only information concerning the type and issuer of the credit card may be recorded.

Disclosure of Nonpublic Personal Financial Information

Additionally, you must comply with the requirements for disclosure of nonpublic personal financial information as outlined in NDAC Section 13-03-18-02 and NDAC Section 45-14-01-15. These sections provide exceptions to notice and authorization requirements for disclosure of nonpublic personal financial information for processing and servicing transactions.

Under NDAC Section 45-14-01-15, the requirements for initial notice, notice and authorization, and service providers and joint marketing do not apply if the licensee discloses nonpublic personal financial information as necessary to effect, administer, or enforce a transaction that a consumer requests or authorizes. This includes servicing or processing an insurance product or service that a consumer requests or authorizes, maintaining or servicing the consumer’s account with a licensee or with another entity as part of a private label credit card program or other extension of credit on behalf of such entity, and a proposed or actual securitization, secondary market sale, including sales of servicing rights, or similar transaction related to a transaction of the consumer.

Privacy Notices

Furthermore, you must provide privacy notices as required by NDAC Section 45-14-01-07. The initial, annual, and revised privacy notices that a licensee provides shall include each of the following items of information, in addition to any other information the licensee wishes to provide, that applies to the licensee and to the consumers to whom the licensee sends its privacy notice:

• The categories of nonpublic personal financial information that the licensee collects;
• The categories of nonpublic personal financial information that the licensee discloses;
• The categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic personal financial information, other than those parties to whom the licensee discloses information under sections 45-14-01-15 and 45-14-01-16;
• The categories of nonpublic personal financial information about the licensee’s former customers that the licensee discloses and the categories of affiliates and nonaffiliated third parties to whom the licensee discloses nonpublic personal financial information about the licensee’s former customers, other than those parties to whom the licensee discloses information under sections 45-14-01-15 and 45-14-01-16;
• If a licensee discloses nonpublic personal financial information to a nonaffiliated third party under section 45-14-01-14, and no other exception in sections 45-14-01-15 and 45-14-01-16 applies to that disclosure, a separate description of the categories of information the licensee discloses and the categories of third parties with whom the licensee has contracted;
• An explanation of the consumer’s right under subsection 1 of section 45-14-01-11 to authorize or not to authorize the disclosure of nonpublic personal financial information to nonaffiliated third parties, including the methods by which the consumer may exercise that right at that time;
• Any disclosures that the licensee makes under section 603(d)(2)(A)(iii) of the federal Fair Credit Reporting Act (that is, notices regarding the ability to opt out of disclosures of information among affiliates);
• The licensee’s policies and practices with respect to protecting the confidentiality and security of nonpublic personal information; and
• Any disclosure that the licensee makes under subsection 2.

In summary, you may collect credit card information from participants in North Dakota if you have an agreement with the credit card issuer and they guarantee the checks or drafts. However, you must also comply with the requirements for disclosure of nonpublic personal financial information and provide privacy notices as required by NDAC Section 45-14-01-07.

Jurisdiction

North Dakota

• Privacy