Update: Credit and Debit Card Receipt Clarification Act of 2007 (H.R. 4008) Seeks to Stem Tide of Litigation Under Fair and Accurate Credit Transactions Act

Attorneys: Guolee, Terrence F.

In our October 2007 newsletter, we reported on the wave of class action litigation spreading across the country based on confusion, or lack of knowledge entirely, by retail and other businesses regarding restrictions on personal information that can be printed on credit card receipts under the Fair and Accurate Credit Transactions Act, codified at 15 U.S.C. §1681 et seq. ("FACTA"). A new bill pending in the U.S. House of Representatives may offer hope to businesses from the potentially devastating effect of this litigation tidal wave.

FACTA, enacted into law in 2003, added new sections to the Fair Credit Reporting Act, requiring businesses come into compliance by December 4, 2006. Now fully effective, FACTA requires businesses to limit the amount of information printed on credit card receipts, as follows:

Except as otherwise provided in this subsection, no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction.

However, due to confusion regarding the requirements of the Act, or lack of knowledge regarding the change in the law, many retail and other businesses continue to provide credit card receipts to customers with expiration dates printed on the receipts. In particular, hundreds of businesses have been sued based on a potential misreading of FACTA to mean that a business would be in compliance, for example, if the receipt provided to the customer included the last 4 digits of the card number and the expiration date.

As a result, a wave of class action litigation has followed, with businesses facing potentially uninsured claims of $100 to $1,000 per each offending transaction, plus potential punitive damages and plaintiff's attorney fees. Indeed, class action claims in many cases have threatened businesses with multi-million dollar claims which would bankrupt many businesses - despite there being no showing whatsoever of any damage or loss of personal information by plaintiffs. Indeed, many studies have shown that there truly is no risk of identity theft based solely on the printing of credit card expiration dates. Nevertheless, the statutory damage scheme of the act presents potential devastation to businesses and the following loss of jobs by their employees.

However, relief may be in sight. On October 30, 2007, the Credit and Debit Card Receipt Clarification Act of 2007 (H.R. 4008) was presented in the U.S. House of Representatives, with the stated purpose of amending the Fair Credit Reporting Act to make technical corrections to the definition of willful noncompliance with respect to violations involving the printing of an expiration date on certain credit and debit card receipts before the date of the enactment of this Act.

H.R. 4008, was introduced by Congressman Tim Mahoney (D-Florida), with local support of Melissa Bean (D-Illinois), among others, and would clarify that any merchant that complied with the truncation requirement for credit card numbers on receipts, but left the expiration date on the receipt, would be in good faith compliance with the law. Moreover, as presented, the resolution would be "retroactive" and affect pending cases, stating, as follows:

Scope of Application- The amendment ... shall apply to any action, other than an action which has become final, that is brought for a violation of 605(g) of the Fair Credit Reporting Act to which such amendment applies without regard to whether such action is brought before or after the date of the enactment of this Act.

Currently, the resolution is pending before the House Financial Services and Judiciary Committees. At the earliest, it appears that action on the resolution will not occur until January or February of 2008. We will report further on the progress of the bill.

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If you have any questions regarding this article, please contact Terrence Guolee via 312-540-7544 or This email address is being protected from spambots. You need JavaScript enabled to view it..