President Signs Law Clarifying FACTA

Effective in December 2006, the Fair and Accurate Credit Transactions Act (FACTA) required that electronically printed customer receipts not display more than the last five digits of the credit/debit card number or the expiration date. Since that time, plaintiffs and plaintiffs' attorneys have filed hundreds of putative class actions across the country against businesses that have printed credit/debit card expiration dates on receipts. In nearly all of the lawsuits, plaintiffs do not allege any actual harm, such as identity theft. Instead, they seek statutory damages of $100 to $1,000 per receipt for alleged "willful violations" of FACTA. Because printing only a card expiration date on a receipt while redacting all but the last five digits of the card number is unlikely to lead to identity theft, the result of the lawsuits has been increased costs to businesses without any corresponding consumer protection benefit.

Congress and the President have now recognized this problem. In May, both the U.S. House of Representatives and the U.S. Senate unanimously passed a bill amending FACTA to provide that printing only a card expiration date on a receipt, while redacting all but the last five digits of the card number, does not constitute a willful violation if the receipt was printed before enactment of the bill. On June 3, 2008, President Bush signed this bill into law. Now that the bill has passed, plaintiffs will no longer be able to claim that receipts printed before June 3, 2008, that contain expiration dates can create liability for damages in the absence of actual harm. However, this new law only protects credit card receipts printed before June 3, 2008 - the date this law was passed. Accordingly, businesses and others who print credit card receipts after June 3, 2008, must be sure their receipts do not show expiration dates and do not show more than the last five digits of card numbers.