California § 1747.90

§ 1747.90.

(a) (1) Subject to the limitation contained in subdivision (b), a card issuer who has issued a credit card to a cardholder pursuant to an open-end consumer credit plan shall be subject to all claims and defenses, other than tort claims, arising out of any transaction in which the credit card is used as a method of payment or extension of credit if the following conditions are met: (A) The cardholder has made a good faith attempt to obtain satisfactory resolution of a disagreement or problem relative to the transaction from the person honoring the credit card. (B) The amount of the initial transaction exceeds fifty dollars ($50). (C) The place where the initial transaction occurred was in California, or, if not within California, then within 100 miles from the cardholder’s current designated address in California. (2) The limitations set forth in subparagraphs (B) and (C) of paragraph (1) with respect to a cardholder’s right to assert claims and defenses against a card issuer shall not be applicable to any transaction in which the person honoring the credit card satisfies any of the following requirements: (A) Is the same person as the card issuer. (B) Is controlled by the card issuer. (C) Is under direct or indirect common control with the card issuer. (D) Is a franchised dealer in the card issuer’s products or services. (E) Has obtained the order for such transaction through a mail solicitation made by or participated in by the card issuer in which the cardholder is solicited to enter into such transaction by using the credit card issued by the card issuer. (b) The amount of claims or defenses asserted by the cardholder may not exceed the amount of credit outstanding with respect to such transaction at the time the cardholder first notifies the card issuer or the person honoring the credit card of such claim or defense. For the purpose of determining the amount of credit outstanding, payments and credits to the cardholder’s account are deemed to have been applied, in the order indicated, to the payment of the following: (1) Late charges in the order of their entry to the account. (2) Finance charges in order of their entry to the account. (3) Debits to the account other than those set forth above, in the order in which each debit entry to the account was made. (c) This section does not apply to the use of a check guarantee card or a debit card in connection with an overdraft credit plan, or to a check guarantee card used in connection with cash advance checks.