FACTA Can Lead To Lawsuits For Customer Receipts

There are some parts of your business that may seem so automatic, so routine, that you give little thought to them. One of those things may be giving receipts to customers who pay for services or products. But the act of printing and giving a receipt can land you in legal trouble if it isn’t done correctly.

FACTA and Receipts

That’s because of a law called the Fair and Accurate Transaction Act, or FACTA. Although the law has a number of provisions, the one that deals with receipts, and which gets some businesses in some serious legal trouble, is the part of the law that prohibits businesses that give receipts, from printing more than the last 5 numbers of a consumer’s credit card on the receipt itself.

The law was intended to stop identity theft, but that good purpose can create legal pitfalls for business owners, who can be sued by customers when there are more than the required 5 digits on the receipts.

And yes you can be sued even if the consumer’s personal information was not stolen; the law allows lawsuits even in the absence of a showing of actual damages. Large retailers have been sued for millions of dollars, usually in class action lawsuits, for printing too much on customer receipts.

Standard to Show Liability

The good news is that to get statutory damages—damages without having any actual harm from the receipts—customers have to show the printing of the receipts with too many numbers was “willful.”

However, as demonstrated by the class action lawsuits against major retailers, that is a standard that many consumers have, in the past, been able to demonstrate. Many courts have defined “willful” as “reckless,” meaning that simply knowing the law exists, and not complying with it, is enough to be in violation of FACTA.

FACTA’s Exemptions

The good news for many businesses is that the law does have a number of exceptions to it.

The first exception is that the law only applies to “point of sale” purchases. That is, where the receipt is exchanged contemporaneously with the sale. However, there is some debate as to whether this law applies to online transactions; some courts have said yes the law applies, given the law’s purpose of deterring identity theft.

The point of sale exception does mean that you are allowed to print as many numbers or digits as you want on a receipt, for any receipt that you are keeping for yourself, for your own records.

Additionally, despite the fact that FACTA awards statutory damages in the absence of actual damages, many courts have required that Plaintiffs show they have suffered some kind of actual financial injury. Just showing too many numbers on the receipt, without more, may not be enough for a Plaintiff to prevail, in some courts.

Call our Fort Lauderdale business lawyers at Sweeney Law P.A. at 954 440-3993 for help getting paid in your construction case.

Sources:

ftc.gov/business-guidance/resources/slip-showing-federal-law-requires-all-businesses-truncate-credit-card-information-receipts

scholarship.law.stjohns.edu/cgi/viewcontent.cgi?article=5566&context=lawreview