Update: Credit Card Receipt Truncation Environment Changing

Written by Evan Schuman
February 22nd, 2008

Ever since federal rules went into effect January 2007 that prohibited credit card receipts from displaying expiration dates or the last several digits of a credit/debit card number, a lengthy list of retailers have been sued for violating the act, including Apple, Rite Aid, Harry & David, Ikea, KB Toys, Disney, Regal Cinemas and AMC Theaters.

Those lawsuits have been met with quite a few legal roadblocks, including several federal judges last year ruling against consumer class-action lawsuit efforts.

While those legal efforts are still pending—awaiting a major federal appellate panel ruling—there have been some recent developments that could directly impact retailers.

On Feb. 9, California-based U.S. District Court Judge R. Gary Klausner ruled against one retailer—the 196-store International Coffee & Tea chain—by refusing to grant the chain’s motion for summary judgment. It simply means the trial efforts will continue.

Of potentially greater significance is a bill introduced in the U.S. House of Representatives on Halloween 2007, H.R. 4008, that attempts to amend the Fair Credit Reporting Act retroactively to try and block most of the lawsuits. The bill argues that most retailers didn’t understand that expiration dates were also banned, even though the original language is quite explicit.

"Many merchants understood that this requirement would be satisfied by truncating the account number down to the last 5 digits based in part on the language of the provision as well as the publicity in the aftermath of the passage of the law," the bill reads. " Almost immediately after the deadline for compliance passed, hundreds of lawsuits were filed alleging that the failure to remove the expiration date was a willful violation of the Fair Credit Reporting Act even where the account number was properly truncated."

The bill proposes that violators of the expiration date be declared "not in willful noncompliance," which would severely undermine most of the lawsuits.

On Jan. 11, H.R. 4008 was referred to the Subcommittee on Financial Institutions and Consumer Credit, within the House Committee on Financial Services. As of Thursday, the bill is still sitting in that subcommittee where, according to one legislative aide on the committee, "nothing is scheduled right now."


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