Okla. Delays Hwy Patrol Plan to Use Card Readers; FinCEN May Have other Ideas
Oklahoma Governor Mary Fallin says state law enforcement will delay using devices that read the magnetic stripes on credit, debit and gift cards as well as any other cards that have financial information on them, following outcries from lawmakers and consumer groups about privacy and legal concerns.
The Oklahoma Highway Patrol purchased 20 Electronic Recovery and Access to Data (ERAD) readers, which the governor’s office says are “intended to apprehend those involved in identity theft or other illegal activities involving monetary transactions. The readers enable troopers to read the back of the strip on a card or other item, such as a hotel room card, to see if it matches the information on the front.”
Media reports focused on the fact that law enforcement could use the readers to seize funds on prepaid cards without a warrant, although Gov. Fallin’s office says no ERAD readers have been used to seize funds. Some critics also worry that low-income citizens who rely on prepaid cards to manage their finances or to receive salary or benefits payments could be disproportionately harmed by the policy. Secretary of Safety and Security Michael Thompson, who also serves as commissioner of the Department of Public Safety, said that before troopers may use the readers, they must have reasonable suspicion to believe a crime has occurred. Troopers typically would not use the devices unless a motorist was stopped traveling with dozens of cards, according to an announcement.
“The Department of Public Safety needs to formulate a clear policy for using this new technology,” said Governor Fallin. “It can be a viable tool for law enforcement only if authorities are able to ensure Oklahoma motorists and others driving through our state that it will be used appropriately.”
More than 25 states use card-reading devices and their use has been upheld by courts, according to the announcement. An NPR report from KGOU notes that most of the cited rulings deal with whether law enforcement can, under the Fourth Amendment, use card readers to search the magnetic stripe on the back of cards, rather than use the devices to freeze or seize funds without a court order.
The policy is reminiscent of a 2011 FinCEN proposal to classify prepaid cards as monetary instruments, for which border patrol would have had to use readers to determine card balances. Anything exceeding $10,000 would have been subject to customs declarations and could have been seized if not declared. FinCEN never issued a final rule; however; a supplemental notice of proposed rulemaking is set for June 2017, according to Regulations.gov. FinCEN did not provide comment by press time.