Illinois Federal Judge rules that FACTA does not apply to e-merchants

In the case of Shlahtichman v. 1-800 Contacts, Inc., U.S. District Judge John Darrah ruled that FACTA's truncation requirements for "printed" receipts does not apply to e-mails sent to purchasers by internet merchants.

The theory, according to Judge Darrah, behind FACTA's requirement that credit card numbers and expiration dates be truncated on receipts, is that such truncation would help prevent "low tech" types of identity theft such as dumpster diving.  According to Judge Darrah, an e-mail sent to a e-purchaser does not fall under the definition of "printed receipt" since its not actually printed, merely e-mailed.  While that is true, I disagree that an e-mail is not a risk for identity theft.  Why should FACTA not try to prevent high tech identity theft as well?

While Judge Darrah is technically correct in his ruling, Congress should take note of his ruling and amend the law to fix this loophole and, in the age of the information superhighway, help protect us all, not just those who do not partake of e-commerce.

Another new FCRA case - Shurland v. Bacci Cafe & Pizzeria

Can't say I've ever sued a pizzeria before.  But one of the latest FCRA cases involves a lawsuit against a pizzeria - Christopher Shurland v. Bacci Cafe & Pizzeria.  The case comes to us from the United States District Court for the Northern District of Illinois, District Judge Rebecca R. Pallmeyer presiding.

The plaintiff purchased a pizza from Bacci Cafe & Pizzeria and paid with a credit card.  His receipt, however, contained his full credit card number and expiration number, a big no no under the FCRA.  Shurland then sued Bacci Cafe & Pizzeria in a class action lawsuit on behalf of everyone else that received receipts with non-truncated credit card numbers.

The pizzeria moved to dismiss the plaintiff's claims via summary judgment, arguing that their violation of the FCRA was not willful (the defendant admitted violating the FCRA) because it did not know of the requirement to truncate credit card numbers.  A willful violation is one committed knowingly or with reckless disregard for the law. 

The Court correctly did not buy the pizzeria's argument that its alleged lack of knowledge of the law gives it a pass.  First, ignorance of the law is no excuse.  Second, the evidence shows that the pizzeria was called by at least three employees of the company that sold it the credit card machine and told that it needed to update its software to comply with the FCRA's requirement to truncate credit card numbers.  Further, the credit card machine company's monthly bill to the pizzeria indicated that truncation was required.  Yet, the pizzeria did nothing (except bake pies). 

The Court correctly denied the pizzeria's motion for summary judgment and granted class certification.