Retailers Sued for Credit Card Numbers on Their Receipts

The lawsuit filed against Apple Inc is the latest one in the chain of class action lawsuit against big retail companies for disclosing credit card information on their receipts. The ones that are under legal attack are Wendy's International Inc., Rite Aid Corp., TJX Cos., FedEx Corp. and Inter Ikea Systems BV.

All of these corporations widely accept credit cards and these lawsuits can seriously damage their reputation.  Moreover, they can negatively affect the whole credit card market because most of regular consumers apply for new credit card offers to be able to pay with plastic for their daily purchases.

According to the Fair and Accurate Credit Transactions Act of 2003 retailers are required to print receipts with no more than 5 digits of a credit card number. Credit card expiration date should also be removed from the receipt. This law tries to protect consumers from credit card fraud that has become a real problem for credit card-issuers, retailers, and credit cardholders. This law also entitles every American citizen or legal resident for a free credit report once a year.

So why do such well-known companies fail to comply with the law? Don't they realize that insecurity of cashless transactions and especially credit card offers hurts the market? First of all, merchants are required to install sophisticated and expensive software. Secondly, the law does not apply to hand-written receipts or the ones imprinted on manual machines.

Of course, these two reasons can not be an excuse for big corporations not complying with federal laws. Some of them blame credit card companies for not informing them about new regulations on time. But most try to play with the interpretations of the Fair and Accurate Credit Transactions Act of 2003. The law seems to be ambiguous because it actually states that retailers must not print the last 5 digits of the credit card number OR the account's expiration date. The National Retail Federation tries to prove that as long as the receipt does not contain both the credit card number and the expiration date the company does not break the law.

Retailers had been counting on the Supreme Court ruling on the consolidated Fair Credit Reporting Act cases. However, the decision was not in their favor. Now retailers are liable for the Fair and Accurate Credit Transactions Act violation even if they have not ‘willfully' violated the law.

It is clear that credit card companies are not able to fight credit card fraud without adequate collaboration from the side of retailers. Issuing companies try to make merchants pay more attention to security by implementing 0 liability policy for their credit card offers. So, if a fraudster makes an unauthorized transaction and it is disputed later on the retailer is the one to lose money.

The credit card market is highly competitive. New attractive credit card offers appear every month. Credit cards are a great convenience for consumers so credit card industry as well as retailers should do their best to protect credit card information.

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