What is the purpose of FACTA receipt privacy laws?

There are many laws in place to help protect consumers, but it is not always clear why these laws were put into place or the ways in which they help combat fraud or other actions.

The Fair and Accurate Credit Transaction Act, or FACTA, was put in place to reduce the risk of theft personal information that could lead to identity theft. FACTA was introduced in 2003 as a federal consumer-rights law that amended the Fair Credit Reporting Act of 1970 (FCRA).

Identity theft occurs when a person steals someone’s personal information and basically assumes their identity in order to make purchases or withdraw money. FACTA stipulates requirements for information privacy, accuracy, and disposal, and limits the ways in which consumer information can be shared.

What does FACTA require?

FACTA introduces consumer receipt laws that affect every person and business in the United States and does many things to protect consumers from fraud and identity theft.

FACTA requires the destruction of certain kinds of personal information.

Under FACTA, if any consumer suspects their identity may have been stolen, a consumer agency is required to place a fraud alert on the consumer’s file for a least 90 days.

FACTA also provides guidance on penalties for those who violate the law.

What are the most important aspects of FACTA?

The primary purpose of FACTA is to reduce the chances of identity fraud and other consumer risks, and there are several important stipulations in the law designed to do this.

First, each consumer has the right to access their own credit reports for free at least once per year from all three of the major credit reporting agencies, according to Tech Target.

Second, a consumer can put an alert on their credit report files if they believe they were subject to fraud. FACTA can help someone who has been a recent victim of identity theft recover their credit history by requiring lending institutions to provide consumers rights documents. The consumers then do not have to disclose their lower-than-normal credit scores.

To prevent possible identity theft, federal banking organizations are made aware of sudden reported changes in a consumer’s address.

Finally, companies that print receipts are responsible for truncating information so the cardholder’s full account number is hidden on any printed receipt.

This last requirement is the one companies most commonly violate.

Per FACTA law, only the last five digits of a credit card number can be printed on a receipt and it is illegal for any part of the card’s expiration date to appear.

How do businesses comply with FACTA?

Businesses can stay on top of FACTA requirements — and avoid FACTA violations and penalties — by implementing a process known as truncation, according to Investopedia.

Truncation replaces digits of a consumer’s payment card information with symbols such as # or *. By replacing essential digits with these symbols, receipts are printed with only the information allowed under FACTA.

For a credit card number of 1111 2222 3333 4444, proper truncation would look like **** **** **** 4444. Improper examples of credit card number truncation include:

• 1111 22** **** 4444
• 1111 **** **** 4444
• **** **** **44 4444

In order for a credit card receipt to comply with FACTA, no information can be included about a card’s expiration date. An expiration date may be truncated as **/**, but most receipts do not include any information about an expiration date. Improper examples of expiration date truncation include:

• EXP: 08/19
• EXP: 08/2019
• EXP: 082019
• EXP: 0819
• Expires: 0819
• Exp Date: 08/19
• Exp Date: 08/31/19
• EXPIRY: 08/19
• 08/19
• 0819
• Date 08/**
• **/19
• 2019/08

Any businesses that fail to properly truncate a consumer’s payment card information may be in violation of FACTA.

In some cases, businesses may attempt to properly truncate receipt information but may commit an error. Even if cases of unintentional violations, businesses can be held accountable under FACTA for failing to protect consumer information.

Can consumers recover damages under FACTA?

If a consumer can show a business violated the law, penalties could apply, according to the Federal Trade Commission (FTC). Statutory damages could be as high as $1,000 for every consumer affected by a violation of the law; business also may have to pay actual damages incurred by consumers harmed by the business practice that violated FACTA.

When large numbers of consumers are affected, they may be able to bring a FACTA class action lawsuit seeking potentially massive statutory damages. For example, if 1,000 consumers were affected by a FACTA violation, a class action lawsuit might seek up to $1 million in statutory damages.

Courts are also authorized to award punitive damages in either an individual lawsuit or a FACTA class action lawsuit. A successful plaintiff or Class may also recover reasonable attorney’s fees.

FACTA authorizes the federal government to bring enforcement actions in federal court for violations of the disposal rule. In some cases, the government may bring an action in federal district court for up to $2,500 in penalties for each independent FACTA violation.

Can lawsuits be filed against FACTA violators?

Consumers who have receipts with these kinds of FACTA violations printed on them could bring forward litigation. When many consumers have been affected, the case might be filed as a class action lawsuit.

One class action lawsuit accused the Los Angeles Dodgers Major League Baseball team of printing receipts that included a consumer’s payment card expiration date information. That consumer brought a class action lawsuit in an effort to hold the company accountable for what the purchaser believed was a violation of the law.

“Given the size and years of experience of Defendants’ business, and the various state and federal regulations governing its business, at minimum were acting with reckless disregard of the FACTA requirements and purpose when they printed the expiration date of credit cards and debit cards along with the last four digits of the account number, together with the last name of customers on ticket receipts,” the Dodgers FACTA class action lawsuit claimed.

Were other businesses involved?

A current investigation is underway to explore whether other businesses could have been involved in the practices outlined above.

If you suspect your rights under FACTA might have been violated, you could have grounds to speak with an experienced attorney through Top Class Actions to discover whether your privacy was violated due to a credit card receipt printed too much information on it.

Join a free credit card receipt class action lawsuit investigation

If you have a receipt, invoice or contract from a retailer or vendor that includes more than the last five digits of your credit card or debit card number or any portion of the expiration date, you may qualify to file a credit card receipt class action lawsuit.

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This article is not legal advice. It is presented 
for informational purposes only.