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

Collecting Credit Card Information in Tennessee

Based on the documents provided, there are certain restrictions on collecting credit card information in Tennessee. TNCO 47-22-104 states that no person shall require a person to produce a credit card number for recordation or record a credit card number in connection with a sale of goods or services in which a purchaser pays by check or the acceptance of a check, except in certain circumstances. A person may require production of and may record a credit card number as a condition for cashing or accepting a check only where:

  1. The person requesting the card number has agreed with the issuer of the card to cash checks as a service to the issuer’s cardholders;
  2. The issuer of the card has agreed to guarantee cardholder checks cashed by that person; or
  3. The cardholder has given actual, apparent or implied authority for use of such cardholder’s card number in this manner and for this purpose.

Therefore, it is generally prohibited to collect credit card information in Tennessee, except in certain circumstances [1.2].

Liability for Unauthorized Use of Credit Card

According to TNCO 47-22-103, any person who has assumed liability for a credit card, either by authorizing its issuance, or as provided in § 47-22-102, and who exercises reasonable care in its use and safekeeping, shall not be liable for the unauthorized use of such card. “Reasonable care” within the meaning of this section requires the person to whom a credit card has been issued to notify promptly the issuer in case of a card which has been lost or stolen. However, failure to notify the issuer shall not result in the liability of more than one hundred dollars ($100) in the unauthorized use of the credit card. Nothing in this chapter will relieve the cardholder of liability if guilty of fraud, misrepresentation, gross negligence, or collusion [1.2].

Conclusion

Based on the documents provided, it is generally prohibited to collect credit card information in Tennessee, except in certain circumstances. Additionally, any person who has assumed liability for a credit card and exercises reasonable care in its use and safekeeping shall not be liable for the unauthorized use of such card.

Source(s):
Jurisdiction

Tennessee