FACTA Violations Prompt Many Consumers to File Lawsuits

A once fairly obscure law regarding credit card receipts has recently become a serious issue for a number of businesses.

Consumers are becoming more aware of their data privacy rights, and attorneys have filed numerous credit and debit cards lawsuits across the country based on alleged violations of the Fair and Accurate Credit Transactions Act (FACTA).

What is FACTA?

On Dec. 4, 2003, former President George W. Bush signed the Fair and Accurate Credit Transactions Act 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 identify theft.

The main provisions of FACTA 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 of 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.

FACTA and the Credit/Debit Card Industry

However, with the new FACTA rules, implementation has been somewhat problematic. One of the issues for the credit and debit card industry has been compliance with the requirement that merchants truncate the credit card number and leave off the expiration date from credit card receipts. Merchants were given three years to make sure that the were in FACTA compliance.

Beginning in December 2006, FACTA lawsuits were filed against merchants, alleging willful violations of FACTA based largely on the fact that while in most instances the credit card or debit card number was truncated, the expiration date on the printed credit card receipt was still showing.

For example, Southwest Airlines is facing a potential consumer class action lawsuit over allegations of FACTA violations accusing the company of printing the expiration date of customers’ credit and debit cards on receipts.

In the FACTA class action lawsuit, filed in a California federal court, lead plaintiff Robert Miller alleges the airline has been violating FACTA since at least October 2007. Miller first noticed the FACTA violation in October 2012 after using a credit/debit card to purchase a ticket from Southwest and saw his card’s expiration date on the credit card receipt.

FACTA prohibits merchants from printing more than the last 5 digits of the card number or the expiration date on any electronically printed credit or debit card receipts.

The Southwest Airlines FACTA class action lawsuit is brought on behalf of all U.S. persons who, within the past five years, were provided an electronically printed receipt at the point of sale or transaction with Southwest Airlines in which the expiration date of their credit or debit card was printed.

Violating FACTA carries a statutory penalty of between $100 and $1,000 for each willful FACTA violation made.

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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