FACTA Law Outlines Credit Card Receipt Violations

Even though FACTA has been in effect for nearly two decades, some merchants across the U.S. who disregard credit card receipt laws continue to violate FACTA.

Consumers are becoming more aware of their data privacy rights, and numerous FACTA lawsuits have been filed across the country based on alleged credit card receipt violations as outlined by the Fair and Accurate Credit Transactions Act (FACTA).

What Is the FACTA Law?

On Dec. 4, 2003, former President George W. Bush signed FACTA into law. The stated purpose of FACTA is to provide consumers, companies, consumer reporting agencies and regulators with important new tools to expand access to credit and other financial services.

It is also supposed to enhance the accuracy of the consumers’ financial information while helping to fight identity theft.

The main provisions of FACTA regulations center on combating identity fraud and protecting consumer privacy. Some of the protections include:

• Giving a consumer the right to a free credit report every year.
• Requiring that merchants leave off all but the last five digits of credit card numbers and leave off the card expiration date from credit/debit card receipts.
• Creating a national system of fraud detection, allowing consumers to make only one call to set off a nationwide fraud alert and establish a nationwide system of fraud alerts for consumers to place on their credit files.
• Requiring regulators to devise a list of FACTA red flag indicators to identify theft to use in their compliance examinations and requiring lenders and credit agencies to create similar guidelines to identify patterns common to identify theft in an effort to stop theft before it can cause major damage.

Merchants were given some time after the law passed to update their systems to comply with the new law, but these regulations have been in full force since Dec. 1, 2006. Complying with these laws s important, the Federal Trade Commission (FTC) says, because “credit card numbers on sales receipts are a ‘golden ticket’ for fraudsters and identity thieves.”

FACTA compliance protects consumers from fraud and identity theft, and protects businesses from potential FACTA litigation or law enforcement action from the FTC.

What Are the FACTA Regulations Surrounding Credit Card Receipts?

The FACTA law prohibits merchants from printing more than the last five digits of the card number or the expiration date on any electronically printed credit or debit card receipts.

The practice of omitting the expiration date and the digits up until the last five on the card is known as truncation. Any business that prints the expiration date or too much of the account number is in violation of FACTA regulations.

These are examples of incorrect ways to truncate credit card or debit card numbers:

• 11** **** **** 4444
• **** **22 **** 4444
• **** **** **33 ****

The correct way to truncate important credit and debit information may look like the following:

• ACCT: ***********12345

In many cases, you may see that a card number is printed with only the last four digits showing, like this:

• **** **** **** 1234

As in this case, fewer than five digits of your card number may be shown, as long as those digits come at the end of the card number.

Expiration dates should be completely censored, and if they show up at all, should look something like this:

• **/**
• ****

Although legally truncating a credit card number appears to be straightforward, businesses that use outdated or inaccurate software and equipment may result in violation of credit card receipt requirements. These errors are likely violations of federal law and may entitle consumers to seek compensation from the business that issues the receipts.

Damages for “negligent” noncompliance with FACTA are limited to actual injuries, such as identity theft. According to Cornell Law School, the legal definition of negligence is “a failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances.”

“Willful” noncompliance, by contrast, carries damages of $100 to $1,000 per debit or credit card receipt violations as well as punitive damages. A person or business deemed willfully noncompliant is found to have committed the act intentionally.

Any merchant that continues to print non-FACTA compliant receipts could be held responsible to pay a large amount in statutory damages for willfully placing individual consumers at risk for identify theft.

As a consumer, if your debit or credit receipt was printed showing the last five digits of your card number, expiration date, or any other data that puts you at risk for identity theft, you may have grounds to file a FACTA lawsuit.

What Companies Have Been Held Responsible for Violations of the FACTA Act?

In 2018, fast food chain Subway and associated company Doctor’s Associates Inc. agreed to a $30.9 million class action settlement due to allegations of FACTA violations.

The settlement amounted to about $52 per consumer who had purchased items at certain Subway restaurants between Jan. 1, 2016 and March 23, 2017. The affected locations had used a Subway Payment Manager system that had been programmed to print credit and debit card expiration dates on customer receipts in violation of the FACTA Act.

According to court records, Doctor’s Associates Inc. had been sued four times previously regarding similar allegations of FACTA violations.

Subway made an unsuccessful bid to have the lawsuit dismissed based on the fact that the lead plaintiff had not suffered injury. However, the judge in the case did not dismiss the lawsuit because the plaintiff was able to show that his Subway receipt was in violation of FACTA credit card receipt laws.

The Subway Lawsuit that settled was Flaum v. Doctor’s Associates Inc., Case No. 0:16-cv-61198, in the U.S. District Court for the Southern District of Florida.

Other companies that have agreed to FACTA class action lawsuit settlements include Jimmy Choo, Microsoft, Godiva Chocolatier, LabCorp and Spirit Airlines.

Should I File a FACTA Lawsuit?

If you have been handed an electronically printed receipt from a merchant and more than the last five digits of your credit card or debit card number appear on the receipt, or if the card’s expiration date appears on the receipt, you could be eligible to collect between $100 and $1,000 per the FACTA Act.

When you report FACTA violations, it’s not just your own financial information and identity that you protect—you’re also protecting the information of many others as well. To satisfy FACTA regulations, businesses use machines programmed with what information to print on a receipt. If one receipt displays a violation, then it is likely that every other customer with a receipt from that machine was also affected by the same error, an issue that could affect hundreds or even thousands of customers.

In some cases, lead plaintiffs in FACTA class action lawsuits have been able to collect an incentive award up to $20,000 for leading the charge against a business who has violated FACTA credit card receipt requirements.

Filing a lawsuit can be a daunting prospect, so Top Class Actions has laid the groundwork by connecting you with an experienced attorney. Consulting an attorney can help you determine if you have a claim, navigate the complexities of litigation, and maximize your potential compensation.

When you get your receipts back, take a second to check your card information to ensure that there have been no FACTA violations. If you do spot a FACTA violation, keep any relevant receipts, which will serve as evidence to support your claim.