The Fair and Accurate Credit Transactions Act (FACTA)

January 03, 2012

In brief: A credit or debit card receipt cannot contain more than the last five (5) digits of the credit or debit card account number, and cannot contain the expiration date of the purchaser's card.

We write to alert our clients and friends of an important Federal law that has serious implications for all who accept credit and debit cards in payment for the sale of goods or services. The law applies to all sales by merchants and covers everything from merchandise, to services, to food, and applies to virtually all consumer transactions.

The Fair and Accurate Credit Transactions Act, 15 USC 1681 ("FACTA") was passed by Congress in 2003. FACTA was enacted in an effort to reduce identity theft. The law specifically provides that no credit or debit card receipt may contain:

• More than the last five (5) digits of the credit or debit card account number.
• The expiration date of the purchaser's card.

Violation of FACTA carries with it a mandatory penalty of no less than $100 and no more than $1000 per violation. A separate violation occurs each time a merchant prints a credit or debit card receipt with either of the two prohibited items. A scourge of costly class action lawsuits have been brought against merchants who have either knowingly or unwittingly violated FACTA. It is not enough that a merchant truncate the card number to no more than the last five digits OR eliminate the card expiration date. BOTH of the elements of FACTA must be satisfied in order to comply with the law.

We have recently learned that a number of our clients and friends may be unaware of FACTA's two-pronged prohibitions and may be violating this law. Because the penalties are so severe, we urge you to immediately verify that your credit and debit card processing system does not print out receipts that include (a) more than the last five numbers of the cardholder's card number or (b) the card's expiration date. If you find that your system produces receipts that contain the prohibited information, you should take immediate steps to correct that problem.

For further information, please contact Berney Kubetz in our Bangor office at 207-947-0111.