Understanding FACTA Rules

One of the more powerful protections against credit fraud and identity theft comes from a federal law that controls how much information merchants can print on a credit card receipt or debit card receipt.

The federal Fair and Accurate Credit Transactions Act, or FACTA, was passed in 2003 as a set of amendments to the Fair Credit Reporting Act. FACTA rules provide many different protections to help consumers avoid identity theft. These protections include:

• Access to one free credit report per year from each of the “Big Three” national credit bureaus.
• The right to flag your credit record with a fraud alert. This alert requires any business to contact the consumer directly before extending them a line of credit, to confirm that the credit has not been applied for fraudulently.
• The right to “block” certain items on your credit report that may have been caused by identity theft.
• The right to get documentation of the imposter’s fraudulent transactions made in the course of identity theft.
• For military service members, the right to an “active duty alert” that helps prevent fraud while they are stationed overseas.

FACTA rules also include certain “Red Flag Guidelines” that impose requirements on businesses to take steps to detect and resolve instances of fraud. These obligations require businesses to watch for certain “red flags” – such as a fraud alert, unusual pattern of credit use, or documents that appear to have been fraudulently manipulated – before they rely on the information provided in a consumer’s credit report.

FACTA Rules Protect Card Information

One of the most powerful FACTA rules gives consumers a right to file a FACTA lawsuit against a merchant who exposes too much credit card information on a printed receipt. The truncation rule forbids any business that provides an electronically printed credit card receipt or debit card receipt from printing more than the last five digits of the card number. The receipt must also not reveal the card’s expiration date.

This FACTA rule applies only to receipts that are printed electronically. It doesn’t apply to a credit card receipt or debit card receipt that is written out by hand or produced by a mechanical imprint of the card.

What makes these FACTA rules so powerful are their statutory damages provisions. While plaintiffs retain the option of proving how much actual harm they suffered, Congress recognized that’s not always possible in cases of credit fraud. Having to prove actual damages on a case-by-case basis could also preclude large numbers of plaintiffs from bringing their claims as a FACTA class action lawsuit.

So the law provides that for each violation that the plaintiff can prove was “willful,” the defendant can be on the hook for statutory damages between $100 and $1,000. On top of that, a successful plaintiff may also be able to recover punitive damages, attorneys’ fees and court costs.

These potential damages can add up quick in cases where a business has set up a noncompliant receipt printing system and allowed it to print potentially thousands of receipts that violate FACTA rules. Some FACTA class action lawsuits have initially asserted claims to damage amounts in the billions.

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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