Intro to the Issue
Legislation passed both House of Representatives and the U.S. Senate to clarify retailer responsibilities when printing credit and debit card transaction receipts. The law (signed by the President) is intended to remove the threat of frivolous lawsuits and help with the defense of already filed litigation.
As part of the Fair and Accurate Credit Transactions Act (FACTA), Congress stipulated 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 card holder at the point of the sale or transaction.” Based upon literal interpretation of the law and publicity surrounding enactment of the provisions, many retailers thought that only truncating the account number down to the last 5 digits would satisfy this requirement.
Almost immediately after the deadline for compliance had passed, hundreds of lawsuits were filed alleging that the failure to remove the expiration date was a willful violation of the Fair Credit Reporting Act even when the account number was properly shortened. None of these lawsuits contained an allegation of harm to any consumer's identity. Experts in the field agree that proper truncation of the card number, by itself as required by the amendment made by FACTA, regardless of the inclusion of the expiration date, prevents a potential fraudster from perpetrating identity theft or credit card fraud. Despite repeatedly being denied class certification, the continued prosecution of these lawsuits represents a significant burden on the hundreds of retailers that have been sued without any corresponding consumer protection benefit.
Why You Should Care
Many convenience and petroleum retailers have been named defendants in litigation claiming willful violation of the Fair Credit Reporting Act despite having complied with the spirit of the original law.
NACS worked with a coalition of retail organizations to pass legislation to clarify the requirements of FACTA and remove the threat of frivolous litigation. H.R. 4008, the Credit and Debit Card Receipt Clarification Act, clarifies that printing the expiration date on a receipt does not represent a willful violation of FACTA if the account number if properly truncated.
On June 3, 2008, the bill was signed into law.