Industry News | May 8, 2008

NRA Likes Legislation Clarifying FACTA

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The National Restaurant Association has expressed support for newly introduced legislation in the U.S. Senate designed to clarify the requirements of the Fair and Accurate Credit Transaction Act of 2003 (FACTA), a federal law restricting the display of credit-and-debit card digits and expiration dates on customer receipts.

U.S. Senator Charles Schumer (D-New York) introduced S. 2978 this week, which is nearly identical to a bill introduced last fall in the U.S. House of Representatives by U.S. Rep. Tim Mahoney (D-Florida).

Senator Schumer's bill helps to clarify the confusing language of the original FACTA by stating that those who truncated the credit card number while leaving the expiration date intact would not be deemed in willful violation of FACTA, and therefore not subject to the related statutory fines.

"The confusion over the interpretation of the law has resulted in a wave of class-action lawsuits against restaurant companies and commercial retailers," says John Gay, senior vice president of Government Affairs and Public Policy for the National Restaurant Association. "The Credit and Debit Card Receipt Clarification Act will clear up the inconsistencies in the law and ensure that the frivolous lawsuits brought on by FACTA are put to an end. We urge Congress to act swiftly on this important issue."

In its current form, FACTA requires that "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 sale or transaction." This provision of FACTA took full effect on December 4, 2006, but the clarity of the FACTA language has been called into question.

Specifically, legal issues have arisen in litigation filed under FACTA on whether the measure requires businesses to cut the number of digits and also remove the expiration date.

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