A Bill Offers Relief to Merchants Besieged by Suits over Receipts

Few people would deny that a law Congress enacted in 2003 mandating payment card receipt truncation had a noble aim?to prevent criminals from getting enough data when they obtained other people's transaction receipts to steal identities or commit card fraud. But some merchants, while complying with the truncation provision that took full effect nearly a year ago, have been hit with lawsuits for printing expiration dates, according to a Congressman who is trying to get merchants off the legal hook. Introduced by U.S. Rep. Tim Mahoney, D-Fla., and dubbed the Credit and Debit Card Receipt Clarification Act of 2007, the bipartisan bill has nine co-sponsors and support from the National Restaurant Association. It aims to correct what sponsors say is vague language that makes it unclear whether printing a card's expiration date is allowed. The language is in the Fair and Accurate Credit Transactions Act of 2003, or FACTA, which amended the Fair Credit Reporting Act. While Congress's main purpose in passing FACTA was to update the 1970s law governing credit reports, the legislation also mandated receipt truncation. FACTA “prohibits businesses from printing more than the last five digits of the card number or the expiration date on any receipt provided to the cardholder,” says a release last week from Mahoney's office. Many retailers and restaurants since last December have been printing no more than five account-number digits on card receipts but are still printing expiration dates. That's caused a number of lawyers to file class-action lawsuits, Mahoney and the National Restaurant Association say. In a supporting statement filed with the bill, the lawmaker claims “hundreds” of suits alleging willful violations by merchants have been filed. Willful violations carry civil penalties of up to $1,000 per transaction, punitive damages, and attorney's fees. Michael Shutley, director of legislative affairs at the Washington, D.C.-based National Restaurant Association, tells Digital Transactions News that plaintiffs don't have to prove any harm under current law. Mahoney's supporting statement says none of the plaintiffs' identities has been compromised. “A pretty good number of members have been hit with lawsuits,” Shutley says. “I think it's based on confusion in the law. Congress left an 'or' in there, which made it confusing.” Mahoney's statement claims “experts in the field” say that even with an expiration date, a receipt with a properly truncated account number still would not enable a person to commit identity theft or card fraud. His bill would amend FACTA to clarify that any merchant that complied with the truncation requirement but printed the expiration date between Dec. 4, 2006 and enactment of the bill would be deemed in good-faith compliance with the law. It was not immediately clear what liability, if any, merchants would bear if they print expiration dates after passage of the bill. Consumers could still sue for negligence in cases of alleged identity theft or card fraud. Numbered H.R. 4008, the bill is pending before the House Financial Services and Judiciary committees.