Facts On FACTA – How Are You Protected?

Facts on FACTA - How Are You Protected?

Congress approved FACTA on December 4, 2003, also known as the Fair & Accurate Credit Transactions Act.It took until December of 2006 for FACTA to become fully effective. The purpose of FACTA is to reduce the amount of personal confidential financial information that is generated and thereby reduce the incidence of identity theft, credit card fraud, and debit card fraud. To help accomplish this goal, 15 USC 1681c(g)(1) requires that merchants that issue receipts to individuals truncate all but the last four or five digits of the customer’s credit card or debit card account number and truncate the entire expiration date.

Much confusion resulted from FACTA, and the Act was effectively ignored by some merchants, despite the fact that the Act was widely discussed and publicized before and after its enactment.Because there were so many lawsuits over FACTA’s “no printing of expiration date” clause, Congree decided to pass an act to protect merchants who didn’t follow that element of the law.

The Clarification Act, or more formally, “The Credit & Debit Card Receipt Clarification Act of 2007,” took effect In June of 2008. After June 3, 2008, a merchant that prints a credit card or debit card’s expiration date on an electronically generated receipt given to a customer is in violation of FACTA, even if the credit card or debit card number is properly truncated.

The Clarification Act, as it is oddly called, actually doesn’t make FACTA any clearer, as much as let previous violators of FACTA off the hook. Specifically, the Clarification Act created a window from December 4, 2004, to June 3, 2008, during which violations of FACTA involving the printing of credit card or debit card expiration dates will not be considered to be willful noncompliance with FACTA.

As a non-attorney banking consultant, my reading of the current requirements for what is now considered to be willful noncompliance with FACTA is:

The printing on an electronically generated receipt of more than the last five digits of a credit card or debit card account number after December 4, 2006.
The act of printing a receipt with the credit card or debit card’s date of expiration, after June of 2008.

Even with the five years and six months of FACTA related discussion, there are somehow merchants that continue to violate the act.It is essential that these store owners and merchants change their IT machines or reprogram them to get in line with FACTA’s regulations. If they fail to do this, it is my professional opinion that there will be another round of FACTA lawsuits aimed at achieving compliance with the requirements of FACTA and the Clarification Act.These lawsuits are already happening.

The author of this article is a Banking Expert Witness Consultant and has worked on over 50 FACTA cases nationwide. This Legal Banking Expert Witness can be reached for technical expert witness testimony through this Expert Witness Services Company. See all Legal Technical Expert Witness Specialties and view full C.V.’s of Legal Technical Expert Witnesses online. This is a free service.