Understanding FACTA Compliance

A mistakenly programmed receipt printer can have huge consequences if the resulting receipts are in violation of FACTA.

FACTA is short for the Fair and Accurate Credit Transactions Act. It was passed as a set of amendments to the Fair Credit Reporting Act in 2003, in part to help protect consumer’s sensitive credit card information from being used for credit fraud or identity theft.

Under FACTA rules, merchants who print customer’s credit card information on an electronically printed receipt must conceal all but the last five digits of the credit card number. They must also completely conceal the expiration date. Any receipt that shows more information than that is not in FACTA compliance.

The truncation requirement applies only to receipts printed electronically; receipts that are written out by hand or that are printed using the old mechanical imprint machine are not subject to the truncation requirement under FACTA rules. Courts still have not reached a consensus as to whether or how the truncation requirement applies to receipts issued electronically, such as internet receipts.

Congress allowed businesses as much as a three-year grace period to update their receipt-printing equipment, depending on the type of equipment. The truncation requirement has been in full effect since December 2006.

Statutory Damages Under FACTA

The nice thing about FACTA – at least for consumers – is that it puts enforcement of the truncation requirement in consumers’ hands. For each violation that a plaintiff can prove was “willful,” the law provides for a minimum $100 to $1,000 in damages, in addition to punitive damages and attorney’s fees.

For these willful violations, plaintiffs may alternatively prove actual damages if something like credit fraud or identity theft followed from the alleged FACTA violations. But they don’t have to – at least where the FACTA violations are willful – because the mere printing of the noncompliant receipt is considered a violation, whether or not any actual harm follows.

As a practical matter, a business doesn’t make just a few FACTA violations at a time. A receipt printer that’s not set up for proper FACTA compliance may print hundreds or thousands of noncompliant receipts before the problem is discovered; the numbers could be vastly higher for big national retailers. Each one of those receipts, even those printed for transactions worth only a few dollars, could lead to statutory damages of as much as $1,000.

And for each noncompliant receipt, there’s a potential class member for a FACTA class action lawsuit. Run the numbers and you’ll see the stakes in such lawsuits can be enormous. Some FACTA lawsuits against large retailers alleged total damage estimates in the tens of billions of dollars.

Even with so much money at stake and several years in which to bring their equipment into compliance, some big retailers are still getting hit with FACTA class action lawsuits. Costco, J. Crew, Jimmy Choo, and P.C. Richard and Son all have faced FACTA claims recently.

One such case was settled in October 2015, when Laboratory Corporation of America agreed to pay a total of $11 million – roughly $200 for each class member. Spirit Airlines also settled a FACTA lawsuit last year to the tune of $265 per class member.

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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