A customer makes a purchase at your store or business. You give them a receipt. It seems like a natural thing to do—of all the things your business does, giving out a receipt hardly sounds like something you could be sued for. But be careful-the Fair and Accurate Credit Transactions Act (FACTA) has a provision that can, and often does, get even the best-intentioned businesses in trouble.
The Chicago business litigation attorneys at Ellis Legal explains more on this below.
What Does FACTA Say?
FACTA has a number of parts to it, but the one section of the Act that often causes legal problems for businesses is the part that talks about receipts. The law says that a receipt can not have any more than five numbers of the consumer's credit card number printed on the receipt. It also cannot have an expiration date on it. As you may expect, preventing identity theft was a significant motivator in including this provision in FACTA.
Many businesses' receipt machines or printers don't understand this—and you could have been giving out receipts with too much information on them without even knowing.
Exceptions
Before you get too frightened, there are a number of exceptions to the law.
First, the law only applies to receipts you are actually giving out (for example, to the consumer). Receipts you keep for your records do not have to comply with the law.
The law only applies to "point of sale" transactions, which would appear to only apply to physical, in-person sales. There is some dispute about whether the law would apply to an online transaction that is not in person, physical, or necessarily at a point of sale. Courts have been divided on this question, so you may just want to assume that the law does apply, especially if you do business in multiple states.
The law also doesn't apply to handwritten receipts (although these are increasingly rare nowadays).
Damages? Maybe Maybe Not
A consumer doesn't get a large amount of damages under FACTA for just the act of getting a receipt with too many numbers on it. But the nominal damages allowed under the act have led to class actions—some of them major, against major big box retailers.
The law allows statutory damages—that is, damages even if the consumer hasn't actually suffered any real damages. But that's only where the violation is "willful." Although willfulness can be hard to prove, some courts have allowed consumers to recover by assuming that all violations of FACTA are willful—that is, that your business should have known about the law.
Other courts have prohibited the recovery of statutory damages, saying a consumer that has no damages has no standing.
Yes, it all sounds confusing. The best practice is just to make sure your receipts, online or in person, are not printing out more than five numbers or the expiration date of consumer credit transactions on receipts.
Speak with a Chicago commercial litigation attorney at Ellis Legal at (312) 967-7629 today to help keep your business out of legal trouble.