Costco Wants FACTA Class Action Lawsuit Tossed

Costco seeks to dismiss a FACTA class action lawsuit filed by a customer who says the company gave her a noncompliant credit card receipt.

Plaintiff Emiguela P. says that when she went to leave Costco with her purchases in January 2016, she was unable to find one of her receipts to present at the door for verification of her purchases. Costco staff directed her to a supervisor, who then printed her a two-page report itemizing her purchases.

Emiguela says that report showed the first six and last four digits of her credit card number. In her Costco lawsuit, she argues that report is a credit card receipt that violates the federal Fair and Accurate Credit Transactions Act, or FACTA.

The FACTA Truncation Requirement

FACTA is a federal law passed in 2003 to update the consumer protections in the Fair Credit Reporting Act. One of the new requirements imposed by FACTA is a limitation on the credit and debit card information that merchants can print on an electronically-printed credit card receipt given to the customer at the point of sale.

Under this “truncation requirement,” these receipts may not display any more than the last five digits of the customer’s credit or debit card number. They may also not display the card’s expiration date.

FACTA also provides for statutory damage awards that can save plaintiffs the trouble of proving actual harm. For each FACTA violation deemed “willful,” plaintiffs can recover $100 to $1,000 in damages.

The Response From Costco

Costco has moved to dismiss Emiguela’s FACTA lawsuit, arguing that FACTA does not apply to the journal report it gave her.

The company says the FACTA truncation requirement applies only to receipts issued at the point of sale. Costco says the words “point of sale” refer specifically to the cash register used to record the sale. They note that FACTA does not expressly define “point of sale,” but also that in the course of drafting FACTA members of Congress repeatedly referred to “cash registers.”

Costco argues that because the journal report was printed away from the register where Emiguela made her purchases, she did not receive that receipt “at the point of sale” – and therefore it is not subject to FACTA’s truncation requirement.

Costco also says Emiguela can’t be entitled to any damages from her claim because she can’t prove that Costco committed any willful violation of FACTA. The company notes that since she has not alleged any actual harm caused by the journal report – such as identity theft that led to financial loss – she would need to rely on FACTA’s provisions for statutory damages to collect any compensation. For a FACTA violation to trigger the statutory damages provisions, that violation must have been willful.

Costco says that since the journal report was printed at Emiguela’s request, and since she has not taken issue with any of the prior receipts she received from Costco, she cannot credibly argue that Costco made any willful violation of FACTA.

The Costco FACTA Lawsuit is Case No. 16-CV-94 in the U.S. District Court for the Northern District of Illinois.

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.

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