WASHINGTON
A bipartisan measure introduced in the U.S. House of Representatives could help to stem a wave of lawsuits filed against restaurateurs by clarifying the Fair and Accurate Credit Transaction Act of 2003, or FACTA.
FACTA, which was passed by Congress in 2003, attempts to reduce identity theft and credit card fraud by preventing criminals from obtaining access to consumers’ private financial and credit information. According to FACTA, restaurateurs and other commercial retailers who accept credit or debit cards must not print more than the final five digits of the card nor the expiration date on a receipt provided to the cardholder at the point of sale.
The law, however, raised questions as to whether merchants were required to both cut the number of digits and excise the expiration date.
Introduced by Rep. Tim Mahoney, D-Fla., The Credit and Debit Card Receipt Clarification Act of 2007, or H.R. 4008, clarifies that any businessperson who truncated the credit or debit card number but included the expiration date on the receipt between Dec. 4, 2004 and date the measure is enacted would be acting in compliance with the law.
Immediately following the passage of FACTA, hundreds of lawsuits were filed claiming that the failure to remove the expiration date was a willful violation of the law even in instances where the account number was truncated. None of those lawsuits have been granted class-action certification.
The National Restaurant Association said it supports the measure. “FACTA has created an enormous amount of confusion among business owners,” said John Gay, the NRA’s senior vice president of Government Affairs and Public Policy. “The Credit and Debit Card Receipt Clarification Act will clear up the inconsistencies in the law and ensure that the frivolous lawsuits brought on by FACTA are put to an end.”