Tracy Colman  |  October 17, 2022

Category: Credit Cards

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FACTA Rules Help Protect Your Credit Card Information

Because fraud and identity theft have become a more serious problem in recent years, there are federal laws in place to protect your credit card information. These laws are known as the Fair and Accurate Credit Transactions Act, which regulates what personal credit card information merchants are permitted to print on receipts, thereby limiting the information available to potential fraudsters.

FACTA has specific rules regarding how the information on a printed receipt must be truncated to best protect your credit card.

It takes more than FACTA rules to protect your credit card information. Indeed, to be most effective, this system needs consumers to be on the lookout for violations of FACTA. If you have been affected by violations of FACTA rules — even if these violations didn’t result in fraud or identity theft — you may be able to pursue a FACTA lawsuit.

Basics of FACTA

The Fair and Accurate Credit Transactions Act (FACTA) was first passed by Congress in 2003 to help protect consumers’ information from fraud and identity theft. It does this by limiting the amount of information that can be printed on debit and credit card receipts.

After FACTA was initially passed, businesses had a few years’ grace period to update or purchase machines that complied with the new rules. FACTA rules have been in full effect since 2006.

There are two pieces of information that FACTA prohibits from being displayed on receipts: any digits other than the last five digits of the credit or debit card number, and any portion of the card’s expiration date.

Truncating, or shortening, the credit card number in any way other than this is a FACTA violation. For instance, printing the first five digits is not allowed, only the last five. Printing fewer than the last five digits is allowed, as long as the numbers are from within those last five digits. On top of this, the expiration date must not be simply truncated, but rather censored entirely.

When a business violates FACTA rules, it can affect more than just one person’s information. This is because a machine that prints one receipt in violation of FACTA rules prints every other receipt with the same errors. If you notice a FACTA receipt violation, reporting the issue can help protect your credit card information as well as the information of hundreds or even thousands of other customers who may have been affected.

How FACTA affected the financial industry

In addition to changing the way the retail and restaurant industries printed receipts, the passage of FACTA had a huge impact on the financial industry. Standards were set in place that required financial lenders and regulators to be on the offensive in terms of looking for activity that could result in identity theft, according to Investopedia.

The new requirements came to be known as red flag rules and they made it essential for banks, credit unions, and other lenders to set up programs to detect suspicious patterns of behavior. One of the requirements enacted was that institutions that provide debit and credit cards have to confirm the correctness of their customers’ addresses and regularly confirm any changes.

When new accounts are created or old ones are accessed by an existing bank or another financial institution patron, there is considerable room for fraudulent activity unless personnel are attuned to these red flag rules instituted by FACTA. False documentation and inaccurate addresses can be provided and point to identity theft.

Credit reports and alerts under FACTA

The passage of FACTA in 2003 also gave a great deal of recourse to individual consumers in terms of credit reporting. Each consumer is now entitled to a free copy of their credit report, annually, from one of three national credit reporting bureaus — Equifax, Experian, and TransUnion. If a consumer has reason to suspect that his or her personal information has been compromised, they can place a fraud alert on their credit information with one of the three credit agencies. The information will then be shared with the other two as a matter of course.

The benefit of this is that if a large ticket item is attempted to be purchased by setting up credit using the personal information, it is likely to be denied because of these alerts.

Pursuing a FACTA lawsuit

If you have received a printed receipt that displays more than the last five digits of your card number, or any portion of the card’s expiration date, you may be entitled to some compensation through a class action lawsuit.

Indeed, where there is one FACTA violation, there are usually many, as the issue lies with machines that have not been updated to properly comply. Hundreds or even thousands of other customers may have been similarly affected by FACTA violations.

Filing a lawsuit can help to hold companies accountable for the personal information they print on receipts, as well as provide some compensation to those affected.

Some lawsuits may result in settlement awards. Being a victim of identity theft due to FACTA violations is not necessary to participate in this investigation — just the violation itself.

Proving that a business violated FACTA is fairly simple. Take note of whether or not your receipts follow FACTA regulations for both card numbers and expiration dates.

Filing a lawsuit can be a daunting prospect, so Top Class Actions has laid the groundwork for you by connecting you with an experienced attorney.

Consulting an attorney can help you determine if you have a claim, navigate the complexities of litigation, and maximize your potential compensation.

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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