Pennsylvania House Bill 1918, now known as Act 60 of 2018 (the “Act”), criminalizes the use, sale, possession and delivery of electronic devices capable of stealing electronic information from credit and debit cards (“Theft Devices”). Previously, theft devices known as skimmers and shimmers have been available for sale on the internet for less than $100. Their fraudulent use causes unsuspecting individuals and businesses to lose personal debit or credit card information that is subsequently sold and used in clone cards to the financial loss of the card holder. Pennsylvania law enforcement officers and prosecutors now have a valuable tool to penalize and reduce such offenses against the public.
Skimmers and shimmers are used at automated teller machines and credit card readers where the card holder inserts a debit or credit card for his own use. A skimmer is placed by the thief over the slot in an ATM or credit card reader. Card holders can readily detect a skimmer by the enlarged plastic edges surrounding the slot for the card. Banks have issued chip cards (“EMVs”) to frustrate skimmers which read only the magnetic strip of the card. However, EMVs retain the magnetic strip so that consumers can purchase from vendors whose readers do not have chip capability. Shimmers are less detectable because thieves locate these thin devices in the slot of the ATM or point of sale machine. They read the electronic strip but cannot read the additional security on an EMV. Often, thieves combine a camera with the theft device to read personal identification numbers typed by the user.
The Act defines a “payment card” as “a credit card, a charge card, a debit card or another card which is issued to an authorized card user to purchase or obtain goods, services, money or another thing of value.” The Act does not define a theft device but clearly codifies its use as “a device which is designed to read and store in the device’s internal memory information encoded on a computer chip, magnetic strip or stripe or other storage mechanism of a payment card other than for the purpose of processing the information to facilitate a financial transaction.” Rather, the Act refers to Theft Devices as “unlawful devices” and recognizes three crimes punishable as felonies.
The first crime occurs when a person with intent to defraud another person uses a theft device to “access, read, obtain, memorize or store information encoded on … a payment card or possesses a device capable of doing so.” This is the act or ability to read and store a payment card’s information. The second crime occurs when a person with intent to defraud another person “places information encoded … on a payment card onto … a different card or possesses a device capable of doing so.” This is the act or ability to replicate such information onto a second credit or debit card not initially issued by the financial institution. The third crime occurs when a person knowingly possesses, sells or delivers a theft device.
Each offense is a felony. The first conviction carries a penalty of a felony of the third degree. The second offense constitutes a felony of the second degree. According to 101 Pa. Code § 15.66, the following maximum periods of incarceration and fines apply: felony of the second degree carries a sentence of incarceration for up to 10 years and a fine of up to $25,000; a felony of the third degree carries maximum penalties of incarceration for 7 years and a fine of $15,000. The Pennsylvania Commission on Sentencing will create sentencing guidelines for these crimes with a range of minimum sentences to be set forth in a grid of offense gravity scores and prior record scores. Whether the victim is compensated for economic loss depends on whether the perpetrator can pay restitution as part of the sentence and any civil judgment if the victim seeks and obtains a judgment for damages. According to Greg Rowe, Director of Legislation and Policy of the Pennsylvania District Attorneys Association, “perpetrators [with such unlawful devices] are not necessarily indigent,” but rather are more likely to have assets because “[skimming and shimming] are more than crimes of opportunity.”
Representative Kristin Phillips-Hill (R-York) was the prime sponsor of House Bill 1918, which passed unanimously in the House and the Senate. When it passed the House, Rep. Phillips-Hill said, “People who question the need for this legislation are shocked to find that it’s perfectly legal to own one of these skimming devices, which have no purpose other than to steal personal information and use it for conducting illegal transactions…..We’re simply closing a loophole that contributes to the excessive number of theft cases that exist statewide.” According to Greg Rowe, “Prosecutors need additional tools to help fight credit card fraud, such as skimming. Rep. Phillips-Hill’s legislation will allow law enforcement to keep up with those who use sophisticated means to commit credit card fraud. The [Act] recognizes the significant personal and financial costs to victims of credit card fraud, and the PDAA applauds this great effort to hold those scammers and skimmers accountable for their crimes.”
Governor Tom Wolf approved the Act on June 28. 2018. It took effect 60 days later.
© 2018 Robert J. Hobaugh, Jr.