Tuesday, June 17, 2008
On June 3, 2008, President Bush signed HR 4008, the Credit and Debit Card Receipt Clarification Act of 2007, into Public Law No. 110-241. The act clarifies provisions of the Fair and Accurate Credit Transactions Act (FACTA) and specifies that any action filed thus far under FACTA for alleged willful noncompliance regarding bankcard expiration dates be eliminated.
Subsequently, Chase Paymentech Solutions LLC contacted all of its merchants to assist them in verifying compliance with FACTA mandates. This step followed multiple prior communications sent by the company to its merchants regarding receipt truncation and expiration date masking requirements.
Specifically, HR 4008 amends Section 616 of the Fair Credit Reporting Act (FCRA) by adding subsection (d), which provides:
"[A]ny person who printed an expiration date on any receipt provided to a consumer cardholder at a point of sale or transaction between Dec. 4, 2004, and the date of enactment of this subsection, but otherwise complied with the requirements of Section 605(g) [15 U.S.C. § 1681c(g)] for such receipt, shall not be in willful noncompliance by reason of printing the expiration date on such receipt."
By stating that a merchant's action in printing the expiration date on the receipt does not constitute a willful violation of the FCRA, the act exempts hundreds of defendants facing class action lawsuits for alleged violations of Section 605(g) of the FCRA from exposure to hundreds of millions – if not billions – of dollars, in potential damages in these cases.
Ross Federgreen, founder of CSRSI, The Payment Advisors, wrote about the Clarification Act in "The facts on FACTA," The Green Sheet, June 9, 2008, issue 08:06:01. "If this becomes law … it will bar plaintiffs from filing claims against merchants who properly truncate card numbers on receipts but fail to eliminate the printing of card expiration dates," he said.
However, merchants who print expiration dates on receipts or otherwise fail to comply with FACTA requirements after June 3, 2008, are not exempt from potential fines.
The act prevents class action attorneys from trying to cash in on a technical violation of a provision in the FCRA, which prohibited merchants from printing the expiration date on credit and debit card receipts.
In a May 13, 2008, letter of support written to Rep. Tim Mahoney, D-Fla., Dan Danner, Executive Vice President of the National Federation of Independent Business, told the sponsor of the bill this legislation "will help to protect small businesses from the ongoing threat of frivolous lawsuits by making a needed technical correction to FACTA.
"HR 4008 will protect small business owners who had printed a customer's credit card expiration date on a receipt while making a good-faith effort to comply with this new law."
Federgreen concluded, "No merchant under any circumstances should print any but the last five digits of the PAN [personal account number] or print the expiration date of a credit or debit card on a cardholder receipt."
In its letter to merchants, Chase asked those who are not truncating card account numbers, or are printing expiration dates on cardholder receipts, to contact their Chase account executives or call the telephone number on their statements. The company also noted that, depending on a merchant's POS configuration, a partial download may be required to facilitate compliance.
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