President George W. Bush signed FACTA, the Fair and Accurate Credit Transactions Act, into law in December 2004. FACTA has remained in the headlines over the past six years. For every point of protection to consumers provided in FACTA there has also been a point of contention from definitions of words, to whether the federal law “undoes’ state consumer protection laws and often to who the law applies.
FACTA is the law that allows consumers to obtain a free credit report once a year. Some states already had a similar state law in place. Can residents of those states in fact now get two free credit reports? It appears so.
The biggest debates over FACTA involved the “Red Flag Rules” and defining “creditor.” Originally set to go into effect in November of 2008, the Red Flag Rules compliance date was changed to May 1, 2009… then August 1, 2009… and then November 1, 2009 and finally June 1, 2009.
Recently FACTA has been in the news again and a new debate has begun. This time, in part, over the word “printed.”
One feature of FACTA is that credit and debit card receipts should not include the credit card’s expiration or more than the last five digits of the card number for electronic printed receipts at the point of sale.
Eduard Shlahtichman filed a suit against 1-800 Contacts related to this part of the FACTA law. Here’s Shlahtichman’s story, a story that is not unusual at all. In June of 2009, Eduard Shlahtichman ordered contact lenses over the Internet from 1-800-Contacts and he used a credit card to pay for his online contact’s purchase. The seller sent Shlahtichman, an e-mail confirmation. The receipt showed the expiration date of Mr. Shlahtichman’s credit card. He filed suit against 1-800 Contacts.
Judge Darrah of North Dakota dismissed the lawsuit against 1-800 Contacts on the grounds that the e-mail confirmation did translate to “printed” and it was not provided “at the point of sale.” Three others judges have affirmed Judge Darrah’s ruling.
This is where the headlines for “FACTA truncation does not apply to e-mails” comes from. According to dictionary.com, truncation is “to cut short by cutting off a top, end or part.” “Truncating” credit card numbers and expiration dates is meant to protect consumers from credit card fraud and identity theft. At this point at least, it is only going to apply to those electronically printed receipts at the register for your new grill, back to school cloths or set of dentures.
Shlahtichman plans to appeal. What does this mean to consumers? While no one is advocating a boycott of shopping online, it is another reminder to protect your computer and e-mail accounts and passwords with diligence.