Originally published November 3, 2008

Keywords: Fair and Accurate Credit Transaction Act, FACTA, credit card suits, Song-Beverley Credit Card Act, personal identification, copycat lawsuits

Despite many courts refusing to certify classes in litigation brought under the federal Fair and Accurate Credit Transaction Act (FACTA), and President Bush signing legislation that ended many of the remaining cases, plaintiffs' counsel continues to look for avenues to bring credit card suits.

Recently, a plaintiffs' firm filed at least five suits in California alleging violations of the Song-Beverly Credit Card Act, California Civil Code Section 1747.08, which prohibits businesses from requesting, or requiring "as a condition to accepting [a] credit card ... payment..., the cardholder to provide personal identification information" including "the cardholder's address and telephone number" and then writing or recording such personal information "upon the credit card transaction form or otherwise."

The complaints allege that the defendant-retailers' violation was simply asking for the plaintiffs' zip code during a sale transaction, followed by entry of the zip code into the retailers' computer systems.

Several theories may be effective in defending against these FACTA cases. For example, in some FACTA cases, courts agreed that a number of plaintiffs were inadequate to represent a class when they merely filed copycat lawsuits and had little involvement in the actual litigation. In other cases, certification was deemed improper where exposure was significant but plaintiff and the proposed class members suffered no actual harm (i.e., because their identity was not actually stolen or even compromised). Additionally, it has been demonstrated that information similar to zip codes, standing alone, cannot be used to steal identity. Finally, there also appears to be a significant threshold issue of whether the alleged conduct even violated the statute: for example, requesting a zip code arguably falls outside the scope of the statute's restrictions against providing the cardholder's "address."

Over the next few months, if earlier FACTA cases are any guide, we expect similar suits to be filed against other retailers, restaurants and any other business that accepts credit cards.

For inquiries related to this alert or for more information about Mayer Brown's Consumer Litigation & Class Actions group please visit www.mayerbrown.com.

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