New amendments to the Fair and Accurate Transactions Act (“FACTA”) (itself an amendment to the Fair Credit Reporting Act (“FCRA”)) bar consumers from alleging willful violation and seeking statutory damages based on the printing of credit card expiration dates on receipts where the account number is otherwise properly truncated in accordance with FACTA. This development means the end is near for scores of class action lawsuits filed last year.
FACTA prohibits the printing of more than five digits of a credit or debit card number or the expiration date on receipts provided to a customer. Since December 4, 2006, consumers have filed hundreds of suits against merchants who allegedly printed a truncated account number and the expiration dates on receipts, arguing that those merchants “willfully” violated FACTA, and seeking $100 to $1,000 for each violation. At least one court has interpreted FACTA to apply to electronic receipts as well as printed ones.
As discussed here last year , the Supreme Court ruled in Safeco Insurance Co. of America, et al. v. Burr, et al that reckless disregard of the requirements of FCRA can constitute willful violation. The court left open the question of whether it was objectively reasonable for merchants to continue to print expiration dates on customer receipts after the date for compliance with FACTA had passed.
In response to the widespread FACTA litigation, Congress amended FCRA to prevent certain putative consumer class actions. The “Credit and Debit Card Receipt Clarification Act of 2007” (“the Act”), signed by President Bush on June 3, amends FCRA to specify that printing expiration dates on receipts where the account number is otherwise properly truncated does not in and of itself constitute willful noncompliance. Consumers will not be entitled to pursue suits claiming willful violation, and thus not be entitled to seek statutory damages, merely because an expiration date is printed on an otherwise compliant receipt. The Act does not affect negligence suits filed by consumers who can show actual harm as a result of the printing of the expiration date, or suits against merchants who are otherwise not in compliance with FACTA’s requirements. The Act applies to any company that printed an expiration date on any receipt provided to a consumer cardholder at a point of sale or transaction between December 4, 2004, and the date of the enactment.
Proskauer summer associate Nicole Ross contributed to this post.