FACTA And Fiction – How You Are Protected
Congress approved FACTA on December 4, 2003, also known as the Fair & Accurate Credit Transactions Act. FACTA became fully effective on December 4, 2006. The purpose of FACTA is to reduce the amount of personal confidential financial information that is generated and thereby reduce the incidence of identity theft, credit card fraud, and debit card fraud. To help accomplish this goal, 15 USC 1681c(g)(1) requires that merchants that issue receipts to individuals truncate all but the last four or five digits of the customer’s credit card or debit card account number and truncate the entire expiration date.
Much confusion resulted from FACTA, and the Act was effectively ignored by some merchants, despite the fact that the Act was widely discussed and publicized before and after its enactment. In response to the many lawsuits that resulted over violations of FACTA, Congress wrote and passed an act to protect businesses that did in fact print expiration dates on credit card or debit card receipts after the effective date of FACTA.
The Credit and Debit Card Receipt Clarification Act of 2007 (the “Clarification Act”) took effect on June 3, 2008. After June 3, 2008, a merchant that prints a credit card or debit card’s expiration date on an electronically generated receipt given to a customer is in violation of FACTA, even if the credit card or debit card number is properly truncated.
The so-called Clarification Act was not really meant to “clarify” anything except that it gave past violators a pass for their failure to follow the requirements of FACTA.The Clarification Act created a specified window between December 2004 and June 2008, in which violations of FACTA’s “no expiration date printings” law was effectively not enforced.
As a non-attorney banking consultant, my reading of the current requirements for what is now considered to be willful noncompliance with FACTA is:
- The printing on an electronically generated receipt of more than the last five digits of a credit card or debit card account number after December 4, 2006.
- The printing of a receipt with the credit or debit card’s date of expiration following June 3, 2008.
As we get close to the six year mark of FACTA’s passing, there are unfathomable examples of merchants who still ignore the rules.It is essential that these store owners and merchants change their IT machines or reprogram them to get in line with FACTA’s regulations.If these merchants do not follow what is required you can expect another succession of lawsuits.These lawsuits are already happening.
The author of this article is a Banking Expert Witness Consultant and has worked on over 50 FACTA cases nationwide. This Legal Banking Expert Witness can be reached for technical expert witness testimony through this Expert Witness Services Company. See all Legal Technical Expert Witness Specialties and view full C.V.’s of Legal Technical Expert Witnesses online. This is a free service.
