June 04, 2008

Change in Law Regulating Credit Card Receipts

On June 3, 2008, President Bush signed into law the Credit and Debit Card Receipt Clarification Act of 2007. PL 110-241, 122 Stat 1565. The Clarification Act provides partial relief from liability to companies who printed expiration dates on customers' credit and debit card receipts issued between December 4, 2004 and June 3, 2008.

Under the Fair and Accurate Credit Transactions Act (FACTA), companies cannot print the expiration date of a customer's credit or debit card on a receipt given to the customer. See 15 U.S.C. § 1681c(g)(1). Before the Clarification Act, courts found that companies who did print the expiration date were willfully violating FACTA and therefore required them to pay statutory penalties and attorneys' fees. See 15 U.S.C. § 1681n.

The Clarification Act, however, expressly eliminates any action for willful noncompliance for past violations of the expiration-date printing ban, saying: "[A]ny person who printed an expiration date on any receipt provided to a consumer cardholder at a point of sale or transaction between December 4, 2004, and the date of the enactment of this subsection but otherwise complied with the requirements of [FACTA] for such receipt shall not be in willful noncompliance by reason of printing such expiration date on the receipt." Sec. 3(a), to be codified at 15 U.S.C. § 1681n(d). The Act applies to all current litigation, as long as it has not yet become final.

The protection provided by the Clarification Act is limited in time. It ended yesterday with the passage of the Act. Going forward, companies must be careful to comply with FACTA's requirement not to print expiration dates on credit or debit card receipts.

The Clarification Act also did not amend the rules for bringing lawsuits for negligent noncompliance with FACTA's expiration date printing ban. See 15 U.S.C. § 1681o. To bring a suit for negligent noncompliance, however, a plaintiff must prove actual damages. And Congress expressly found in the Clarification Act that if the credit or debit card number is truncated on the receipt, that alone "prevents a potential fraudster from perpetrating identity theft or credit card fraud," "regardless of the inclusion of the expiration date." H.R. 4008, § 2(a)(6). Hence, companies can argue that customers who received receipts containing expiration dates did not suffer any actual damages.

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