FACTA Violations

A new Supreme Court decision may change the way plaintiffs have to prove willful FACTA violations.

FACTA, or the Fair and Accurate Credit Transactions Act, was passed in 2003 as a set of amendments to the Fair Credit Reporting Act. Congress had in mind to create new protections against a growing problem of identity theft and credit fraud.

One of the new FACTA rules was a restriction on how much account information businesses can print on electronically-printed credit card receipts or debit card receipts.

For a receipt to be within FACTA compliance, this “truncation requirement” says that it must not show more than the last five digits of the card number, and it must also not reveal the card’s expiration date.

For willful FACTA violations of the truncation requirement, Congress provided that plaintiffs can get between $100 and $1,000 in statutory damages for each receipt that is not in FACTA compliance.

These provisions have made for some multi-million dollar settlements, particularly in cases brought as FACTA class action lawsuits alleging multiple FACTA violations against an entire class of plaintiffs.

FACTA Violations After Spokeo

Historically, thanks to these statutory damages provisions, plaintiffs who could prove that FACTA violations were “willful” have not had to prove that they caused actual harm.  A recent decision by the U.S. Supreme Court may make those statutory damages harder to get than they’ve been in the past.

Though the case, Spokeo Inc. v. Robins, was brought under other provisions under the Fair Credit Reporting Act, the principles under which it was decided could affect plaintiffs suing under FACTA too.

In Spokeo, the Court decided that a plaintiff needs to allege more than just a “bare procedural violation” of a federal statute to get their case into court. To have the standing required by the Constitution, the Court said, the plaintiff must also allege some actual injury.

The plaintiff in Spokeo sued the website for publishing what he alleged was inaccurate information about him.

While the plaintiff made general allegations that the alleged misinformation had hampered the job search he was conducting at the time, the gist of his legal claim was that Spokeo had willfully violated the FCRA by failing to follow “reasonable procedures to assure maximum possible accuracy” of consumer reports.

The plaintiff sought to enforce his FCRA rights by demonstrating that violation, without necessarily having to prove any resulting harm.

But the Court determined that even if a statute like the FCRA purports to confer some right on a plaintiff, plus the ability to sue when that right is violated, the Constitution still requires that the plaintiff have some sort of actual injury.

The Court did say that certain “intangible” harms could be adequate to base a claim on. They offered some general principles for determining whether such an intangible harm is adequate, but they did not state a specific and clear rule that would govern all cases.

After Spokeo, plaintiffs making claims of FACTA violations will likely face a similar obstacle. The FACTA rules that provide for statutory damages are similar to those the plaintiff sued under in Spokeo.

As will all possible legal claims, the details matter. A knowledgeable FACTA attorney can advise a potential plaintiff about how Spokeo may affect their FACTA claim and what other possible legal options they may have.

Free FACTA Class Action Lawsuit Investigation

If you made one or more purchases and the retailer provided you with a receipt that contained more than the last five digits of your credit or debit card number or the expiration date, you may be eligible for a free class action lawsuit investigation and to pursue compensation for these FACTA violations.

Get Started