As a Matter of FACTA

Just heard about an interesting lawsuit filed in Florida. Turns out there’s a federal law called FACTA – the Fair and Accurate Credit Transaction Act of 2003. You can read all about it at the Privacy Rights Clearinghouse, but first, a little info on this particular incident

A woman eats at a restaurant. She pays by credit card and gets her receipt. She sees her card’s expiration date is printed on the receipt and she files a lawsuit against the restaurant for a violation of FACTA. She spent $18 on her meal. She wants $7500 to make the case go away. The lawyer for the restaurant does a little research and finds out the plaintiff has 7 other cases pending…just like this one. Seems the woman heard a little bit about FACTA somewhere and went in search of ways to make some easy cash.

According to the Privacy Rights Clearinghouse, this is the section of the law that applies:

C. Truncation: Credit Cards, Debit Cards, Social Security Numbers

Credit card receipts that include full account numbers and expiration dates are a gold mine for identity thieves. In some states, printing of the full account number is already prohibited. For the future, FACTA sets a national standard requiring truncation of credit card information.

FACTA says credit and debit card receipts may not include more than the last five digits of the card number. Nor may the card’s expiration date be printed on the cardholder’s receipt.However, the effective date of this provision is a long way off, and there are a couple of loopholes:

This section does not apply to receipts for which the sole means of recording a credit or debt card number is by handwriting or by an imprint or copy of the card…

Now, as someone who has had her credit card number stolen (twice), I am all for regulations that protect consumers from identity thieves. But a reasonable human being would inform the restaurant that its credit card machine was configured improperly and be done with it. Or at least one would hope. Instead, this patron decides to exploit and tax the legal system to the tune of thousands of dollars.

If the woman had suffered any sort of damage or inconvenience due to the restaurant’s noncompliance with FACTA, then I absolutely agree she should be compensated accordingly. However, this patron did not. She merely ate a meal, paid a bill, saved a receipt, and filed a suit.

Hunting around for more on FACTA lawsuits, I found this write from February 2007. Seems some 50 retail chains found themselves on the wrong end of a class action suit because some stores slipped through the cracks when it came time to make point-of-sale system upgrades.

Again, willful negligence deserves to be punished, especially if someone suffers because of it. But milking federal law for fiscal gain in the absence of any actual damages is, in fact, a shame. In Florida, it’s also a crime.

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