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The law says a business that printed an expiration date on a receipt over the past 18 months cannot be found in violation of the Fair Credit Reporting Act (FCRA) as long as the merchant printed no more than the last five digits of customers’ credit or debit card numbers on receipts and complied with other FCRA requirements.
“Hundreds of merchants, including chain restaurateurs, have inadvertently run afoul of the law due to the confusing manner in which this provision was written,” says NCCR Vice President Scott Vinson. “Most businesses made good faith efforts to comply with the law by truncating credit card numbers but were unaware of Congress’ apparent intent that expiration dates be omitted.”
The House and Senate approved the Credit and Debit Receipt Clarification Act without opposition in May. The bill was sponsored as H.R. 4008 in the House by Financial Services Committee member Representative Tim Mahoney (D-FL) and as S. 2978 in the Senate by Banking, Housing, and Urban Affairs Committee member Senator Charles Schumer (D-NY).
At issue is a provision in the Fair and Accurate Credit Transactions Act (FACTA)--a 2003 update of FCRA--intended to prevent credit card fraud. Under FACTA, merchants were told they could no longer print more than the last five digits of a credit or debit card number “or” the card’s expiration date on receipts after December 4, 2006. Many merchants interpreted the law as meaning they could either truncate the card number or leave off the expiration date, but that they were not required to do both. Most truncated the card number, but some continued printing the expiration date, reasoning that the expiration date was of no value without the full card number.
Businesses have been hit with more than 300 class action lawsuits contending that FACTA required them to take both steps and seeking fines as high as $1,000 per incident, the maximum allowed under the 2003 law. FACTA does not allow individuals to sue, instead giving enforcement authority to the Federal Trade Commission, but the lawsuits were brought under state laws citing FACTA.
“The continued proliferation of these lawsuits is an unnecessary drain on resources during a time of financial uncertainty in the nation’s economy,” says NCCR Vice President Scott Vinson. “Chain restaurant operators nationwide are pleased that Congress has passed and President Bush has signed this common sense legislation.”
The legislation protects businesses from lawsuits for expiration dates printed between the time the FACTA rule went into effect and the time the measure is signed into law. Merchants are required to both truncate card numbers and leave off expiration dates going forward.