The U.S. Court of Appeals for the Third Circuit recently held that a retailer violated the federal Fair and Accurate Credit Transactions Act (FACTA) by printing the expiration month, along with the last four digits of the credit card account number, on its credit card receipts. However, the Third Circuit further held that the violation was not "willful."
A copy of the opinion is available at:
When a consumer purchased goods from a retailer, he received a receipt that displayed the last four digits of his credit card account number, as well as the expiration month, but not the year, of that credit card. Although the consumer conceded that he did not suffer any actual damages, he nevertheless filed a class action against the retailer, alleging that the retailer willfully violated the federal Fair and Accurate Transactions Act ("FACTA") credit card receipt truncation requirements by printing the expiration month of his credit card on its receipt.
The lower court granted the retailer's motion to dismiss, holding that FACTA's prohibition of listing the expiration date of credit cards in addition to the truncated credit card number on receipts was not violated by printing only the month of expiration, and that in any event the violation was not "willful."
As you may recall, FACTA provides that merchants may not "print more than the last 5 digits of the [credit] card number or the expiration date upon any receipt provided to the cardholder..." 15 U.S.C. Sec. 1681o(a)(1). If the violation was merely negligent, only actual damages are available to a plaintiff; however, if the violation was willful, a plaintiff may recover punitive and statutory damages as well. Id. at 1681(n)(a)(1)(A) and (a)(2).
The Third Circuit noted that FACTA did not address whether printing a partial expiration date constitutes a violation. However, it further noted that the statute explicitly permitted the partial printing of credit card account numbers. Therefore, in the Court's view, "if Congress had intended to allow a partial printing [of expiration dates], it would have used language similar to what it used for credit or debit card numbers."
Accordingly, the Court held that FACTA "prohibits a merchant from printing expiration date information on a receipt provided to the consumer, even if the year is redacted."
Having determined that FACTA was violated, the Third Circuit turned to whether the violation was willful. It held that it was not.
To reach that conclusion, the Third Circuit first noted that the relevant question is whether the retailer's interpretation of the statute was "objectively unreasonable," and not merely erroneous.
Here, the retailer contended that the phrase "expiration date" was not defined under the statute, and further that reading "expiration date" to refer to both a month and a year was not objectively unreasonable. The Third Circuit agreed, holding that the consumer "has not stated a claim for a willful violation of FACTA." Therefore, the Court affirmed the lower court's order.
Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
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Chicago, Illinois 60602
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Email: RWutscher@mtwllp.com
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