Avoiding Lawsuits About Credit Card Receipt Information
12/17/2007The Fair and Accurate Credit Transactions Act (FACTA) is part of the Fair Credit Reporting Act. It provides that no business accepting credit cards for business transactions may print more than five digits of the credit card number or the expiration date on customer receipts. As of December 4, 2006, all receipts were required to be in compliance.
Since December 2006, more than 300 class action lawsuits have been filed under FACTA. These lawsuits are filed by a small number of plaintiffs’ lawyers. One reason these lawsuits are so prolific is that FACTA provides for statutory damages in the event of a willful violation. The statutory damages run $100 to $1000 per transaction. Unlike many other federal fair credit regulations, there is no limit on recoverable damages.
In order to ensure compliance, businesses should make sure their point-of-sale systems are not printing expiration dates and that they are truncating credit card numbers. The majority of these lawsuits are filed because registers continued to print expiration dates. Even if a company prints only the last four digits of the card number (as most do), it should not print the expiration date.
Second, businesses should check samples of customer receipts from each of their locations. If they have online purchasers, they should check their online sale verification screens. Point-of-sale vendors should not be relied upon to install and utilize the proper software.
If a company’s receipts are not compliant, it should take the necessary steps to fix the problem and document its efforts to comply with FACTA. In the event of a lawsuit, prompt correction of the problem may support an argument that violation of the statute was not willful.
