Oklahoma governor suspends use of controversial card readers

This photo, obtained by Fox affiliate KOKH, shows an ERAD machine used by the Oklahoma Highway Patrol.

Oklahoma state police have suspended a program that uses scanner technology to detect counterfeit credit cards amid growing concerns that it could allow cops to empty the bank accounts of law-abiding citizens.

The decision was ordered by Gov. Mary Fallin hours after FoxNews.com published a report Friday about concerns that the scanners could make civil forfeiture too easy.

"The Department of Public Safety needs to formulate a clear policy for using this new technology," said 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.”

The Oklahoma Highway Patrol was given the devices to freeze and seize money loaded onto prepaid debit cards by alleged drug traffickers, with the potential to net up to $8,000 per portable scanner.

Supporters of the program, which had only been in the field for about six weeks, say it's an important tool for law enforcement agencies to interrupt the flow of illegal drugs into Oklahoma.

Critics were alarmed that the company supplying the machines would have gotten a percentage of seized assets, saying the arangement created an incentive for abuse of civil forfeiture laws by police and prosecutors. Opponents say such devices are an infringement on Fourth Amendment prohibitions of unreasonable search and seizure -- and that police departments are in turn stuffing their wallets with the cash from innocent civilians.

"Suspending OHP's card scanner program is the appropriate response until we know exactly what the full capabilities of these devices are," said Oklahoma State Sen. Kyle Loveless, who is strongly opposed to the machines.

"When we are faced with balancing Constitutional liberty and public safety, we should always err on the side of the Constitution until we have all the facts," Loveless, a Republican, told FoxNews.com.

"If we really want to assure Oklahomans the right of due process we need complete reform of our un-American Civil Asset Forfeiture laws," he said.

The Oklahoma Department of Public Safety signed a contract with Texas-based ERAD Group to use the devices, which work on "open loop" prepaid debit cards, like those provided by American Express and Visa. But "debit cards attached to a valid checking account or valid credit cards cannot be processed" by ERAD, which stands for Electronic Recovery and Access to Data.

The company that manufactures the devices is also promised 7.7 percent of all money forfeited using the machines, according to one contract obtained by Oklahoma Watch.

"It's just absolutely appalling that a private company can profit from this forfeited property," said Nick Sibillia, of the Institute for Justice.

The card readers, which are said to be used in at least 25 other states, have reignited debate over civil asset forfeiture -- a legal tool used by police and prosecutors across the country to take millions of dollars in cash, cars, homes and more every year. Their use has been upheld by courts.

Under civil forfeiture, law enforcement can seize property without charging an individual with a crime. Unlike criminal forfeiture, no conviction is necessary to seize assets -- a law opponents say threatens basic rights to property and due process.

Further, state and federal statute allows for cash and assets associated with the drug trade to become the property of a policing agency through civil litigation. In many places, cash and property seized boosts the budgets of the very police agencies and prosecutor’s offices that took it. In 2012, 70 percent of all forfeiture expenditures in Oklahoma funded salaries for law enforcement, according to data obtained by The Institute for Justice.

In the case of the ERAD system, the Oklahoma Highway Patrol says the machines are important in fighting identity theft and credit card fraud.

In an interview last week with FoxNews.com, Capt. Paul Timmons sought to clarify "misinformation" he said has made people panic."

This is a tool for our troopers to use when they suspect there’s criminal activity," he said. "We don’t have access to anyone’s personal banking activity -- that’s all protected information."

Loveless and others say many legitimate business use the cards targeted by ERAD machines. He also noted that prepaid cards are the only source of banking for many lower-income and young people and that unemployment, disability and other government assistance programs give money using prepaid cards.

Loveless called civil forfeiture a "growing problem" in the state, claiming most forfeitures there average $1,200 and that Oklahoma counties are "taking in millions of dollars a year."