SB-505
Consumer Protection

Money Transmission Act: stored value platforms: fraudulently induced transfers.

Introduced
CA
2025-2026 Regular Session
0
0
Track

Key Takeaways

  • Requires digital payment platforms to reimburse customers for losses caused by fraudulently induced transfers.
  • Mandates platforms to investigate fraud claims within 10 business days and issue refunds within one day if fraud is confirmed.
  • Establishes multiple ways for customers to submit fraud claims including mail, phone, email, and mobile apps.
  • Requires platforms to notify customers of their fraud protection rights by July 1, 2026.

Summary

Senator Richardson's proposal to protect consumers from digital payment fraud would require stored value platform operators to reimburse customers for losses caused by fraudulently induced transfers. The legislation defines these transfers as transactions initiated through deception or manipulation that result in stored value being sent to accounts outside the customer's control.

The bill establishes a structured claims and investigation process that stored value platforms must follow. Operators would need to provide multiple channels for customers to submit reimbursement claims, including mail, phone, email, and digital communications through both websites and mobile applications. Upon receiving a claim, platforms must complete investigations within 10 business days and reimburse verified losses within one business day. For complex cases requiring additional investigation time, operators may take up to 45 days but must provisionally credit customer accounts within the initial 10-day window.

Under the proposal, platforms must notify customers of these rights by July 1, 2026, and update their terms of service to reflect the reimbursement requirements. The Department of Financial Protection and Innovation would oversee compliance and could order operators to provide restitution or monetary relief to affected customers. The measure builds upon existing Money Transmission Act requirements for stored value issuers while creating new consumer protection mechanisms specific to fraudulent transfers.

Key Dates

Next Step
Referred to the Senate Standing Committee on Banking and Financial Institutions
Next Step
Senate Committee
Referred to the Senate Standing Committee on Banking and Financial Institutions
Hearing has not been scheduled yet
Introduced. Read first time. To Com. on RLS. for assignment. To print.
Senate Floor
Introduced. Read first time. To Com. on RLS. for assignment. To print.
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Contacts

Profile
Roger NielloR
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Tim GraysonD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Monique LimonD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Sabrina CervantesD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Melissa HurtadoD
Senator
Committee Member
Not Contacted
Not Contacted
0 of 6 row(s) selected.
Page 1 of 2
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Profile
Roger NielloR
Senator
Committee Member
Profile
Tim GraysonD
Senator
Committee Member
Profile
Monique LimonD
Senator
Committee Member
Profile
Sabrina CervantesD
Senator
Committee Member
Profile
Melissa HurtadoD
Senator
Committee Member
Profile
Laura RichardsonD
Senator
Bill Author

Get Involved

Act Now!

Email the authors or create an email template to send to all relevant legislators.

Introduced By

Laura Richardson
Laura RichardsonD
California State Senator
10% progression
Bill has been formally introduced and read for the first time in its house of origin (2/19/2025)

Key Takeaways

  • Requires digital payment platforms to reimburse customers for losses caused by fraudulently induced transfers.
  • Mandates platforms to investigate fraud claims within 10 business days and issue refunds within one day if fraud is confirmed.
  • Establishes multiple ways for customers to submit fraud claims including mail, phone, email, and mobile apps.
  • Requires platforms to notify customers of their fraud protection rights by July 1, 2026.

Get Involved

Act Now!

Email the authors or create an email template to send to all relevant legislators.

Introduced By

Laura Richardson
Laura RichardsonD
California State Senator

Summary

Senator Richardson's proposal to protect consumers from digital payment fraud would require stored value platform operators to reimburse customers for losses caused by fraudulently induced transfers. The legislation defines these transfers as transactions initiated through deception or manipulation that result in stored value being sent to accounts outside the customer's control.

The bill establishes a structured claims and investigation process that stored value platforms must follow. Operators would need to provide multiple channels for customers to submit reimbursement claims, including mail, phone, email, and digital communications through both websites and mobile applications. Upon receiving a claim, platforms must complete investigations within 10 business days and reimburse verified losses within one business day. For complex cases requiring additional investigation time, operators may take up to 45 days but must provisionally credit customer accounts within the initial 10-day window.

Under the proposal, platforms must notify customers of these rights by July 1, 2026, and update their terms of service to reflect the reimbursement requirements. The Department of Financial Protection and Innovation would oversee compliance and could order operators to provide restitution or monetary relief to affected customers. The measure builds upon existing Money Transmission Act requirements for stored value issuers while creating new consumer protection mechanisms specific to fraudulent transfers.

10% progression
Bill has been formally introduced and read for the first time in its house of origin (2/19/2025)

Key Dates

Next Step
Referred to the Senate Standing Committee on Banking and Financial Institutions
Next Step
Senate Committee
Referred to the Senate Standing Committee on Banking and Financial Institutions
Hearing has not been scheduled yet
Introduced. Read first time. To Com. on RLS. for assignment. To print.
Senate Floor
Introduced. Read first time. To Com. on RLS. for assignment. To print.
Introduced. Read first time. To Com. on RLS. for assignment. To print.

Contacts

Profile
Roger NielloR
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Tim GraysonD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Monique LimonD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Sabrina CervantesD
Senator
Committee Member
Not Contacted
Not Contacted
Profile
Melissa HurtadoD
Senator
Committee Member
Not Contacted
Not Contacted
0 of 6 row(s) selected.
Page 1 of 2
Select All Legislators
Profile
Roger NielloR
Senator
Committee Member
Profile
Tim GraysonD
Senator
Committee Member
Profile
Monique LimonD
Senator
Committee Member
Profile
Sabrina CervantesD
Senator
Committee Member
Profile
Melissa HurtadoD
Senator
Committee Member
Profile
Laura RichardsonD
Senator
Bill Author