Yes, I believe what happened was that the card associations had enough
clout to get legislation passed prohibiting merchants from taking credit
card numbers as guarantees for checks. In Massachusetts, the law is that
they can ask for and look at a credit card and refuse the check sale if
you don't have one but are prohibited from making any record of the card
numbers.
Note that the card associations did have some other recourse. They could
send stern memos to the merchants, look for any actually trying to put
through a charge to cover a bad check, and bounce them as merchants.
(Something like 1% of merchants a year get blacklisted by most card
associations due to fraud or some problem.)
Also they could have put a notice on each card saying it was for card
transactions only, but that might have had some negative publicity
effects.
Donald
On Tue, 17 Oct 1995, Hal wrote:
From: Jueneman(_at_)gte(_dot_)com
If the CA accepts identification information from someone in good faith
and has been reasonably diligent about checking them, they should not be
subject to suit if someone claims a false identity by us of a forged or
stolen dirver's license, for example. Yet at present, they could be, and
the current Utah law requires very substantial capital be tied up to make
sure that the CA has adequately deep pockets to pay off such suits. I
believe this to be inherently unfair, and it raises the bar far too high.
As a result, organizations such as Visa are motivated to use nonstandard
certificate formats as a means of trying to avoid any liability if one of
their "crednetials" is used for anything other than the intended purpose.
Hasn't this issue already come up with credit cards? I recall some
merchants used to accept credit cards as a form of ID. Presumably cards
like Citibank's which can have photos embedded in them would be even more
suitable for that use. But the same argument would seem to apply, that
if someone relied on the card as ID and they got cheated, they might try
to sue the bank. Was legislation involved here? I seem to recall some
laws which would forbid the use of credit cards as ID, at least in
California. Does anyone know the story?
Hal Finney
hfinney(_at_)shell(_dot_)portal(_dot_)com
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