HOUSE BILL REPORT

HB 2789

BYRepresentatives Cooper, Hankins, Nelson, Dorn, R. Meyers, Crane and H. Myers 

Revising provisions on fraud in obtaining telecommunications services.

House Committe on Energy & Utilities

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (12)

      Signed by Representatives Nelson, Chair; H. Myers, Vice Chair; Hankins, Ranking Republican Member; Bennett, Brooks, Cooper, Jacobsen, Jesernig, May, R. Meyers, Miller and S. Wilson.

House Staff:Harry Reinert (786-7110)

AS REPORTED BY COMMITTEE ON ENERGY & UTILITIES JANUARY 26, 1990

BACKGROUND:

Washington state makes it illegal to publish the number or code of a telephone credit card or the numbering or coding that is used by the company to issue credit cards.  A violation of this provision is a gross misdemeanor, which is punishable by fine of $5,000 and one year in jail.  The state has also made it unlawful to obtain telephone or telegraph services by fraud.  If the value of the fraudulently obtained service is less than $50, the offense is a misdemeanor, subject to 90 days in jail and a $1,000 fine. If the services are valued at between $50 and $250, the offense is a gross misdemeanor.  Services valued at more than $250 result in a class C felony, which is subject to a fine of $10,000 and five years in prison.

Washington state has also made unlawful the theft of access devices or the possession of stolen access devices.  Access devices include credit cards, bank machine cards, codes, or account numbers which can be used to obtain money, goods, or services, or that can be used to initiate the transfer of money.  It is a class C felony to steal an access device.  Depending on the value of the property, possessing stolen access devices may be a gross misdemeanor, a class C felony, or a class B felony.

SUMMARY:

SUBSTITUTE BILL:  The prohibition on defrauding a telephone or telegraph company is expanded to include telecommunications companies.  In addition to the fraudulent use of names or numbers, a person may commit fraud by installing, rearranging, or tampering with any equipment, using any telecommunications device, or by computer trespass.

In addition to the prohibition on publishing the number of a telephone credit card, it is illegal to sell, rent, lend, or advertise the number.

A telephone company, the prosecuting attorney, or a person injured by fraudulent activity may file a civil action against a person who is engaged in or about to be engaged in a violation of the prohibitions on fraud or publication of numbers and obtain temporary and permanent orders restraining the person from committing the acts.  The court may order the sheriff to seize and retain any device being used in violation of the act. Such seized property either is forfeited or is returned if the court finds lack of willfulness or intent to violate the law, or other mitigating circumstances.  The court may, upon a proper showing, order the telephone company to disconnect the particular telecommunications service the person is using to defraud the telecommunications company.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The substitute adds definitions of computers and computer trespass, modifies the definition of a telecommunications device, allows a person injured by the fraud to initiate the civil proceeding, and makes technical and clarification changes.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Steve Wehrly, MCI and T. K. Bently, SPRINT.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    State law on defrauding telecommunications companies has not kept up with the changing technology.

House Committee - Testimony Against:      None.