For both customer satisfaction and competitive reasons, virtually every retail business, from stores to restaurants to theaters, must allow consumers to use credit or debit cards. For economic reasons, almost all of these transactions are electronically authorized in real time. This convenience creates a risk that a customer’s credit or debit card information could be stolen and misused by identity thieves. To limit this risk, Congress passed the Fair and Accurate Credit Transactions Act (''FACTA''), which requires, among other things, that “no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of sale transaction.” In our litigious society, however, plaintiffs’ class action lawyers are seeking to use the statute to extract huge attorneys’ fee recoveries by filing claims for people who have not suffered any actual damage.
Any business that accepts credit and/or debit card payments for the sale of goods and/or services should be keenly aware of the requirements of FACTA, and, at least until the statutory terms are authoritatively interpreted, both remove the expiration date and truncate the credit card numbers. If a business has already done this prior to the statute’s effective date, then no further action is likely required. If a business has not yet complied or is facing actual or prospective litigation for a purported violation, this client alert provides an overview of the law, suggestions for actions to limit or eliminate liability, and potential legal defenses to the claims.