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On December of 2003, Congress signed into law the FACTA, or the Fair and 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 make sure of this, a section of the law mandates that stores and business owners get rid of all but the last four or five digits of the credit card number on the reciept, and not have any of the expiration date visible.

Even though FACTA was widely publicized and discussed, many merchants blatantly ignored the act and others were simply confused in its implementation.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.

As we get close to the six year mark of FACTA’s passing, there are unfathomable examples of merchants who still ignore the rules.  These merchants must immediately take the relatively easy and inexpensive steps required to reprogram their IT systems so that they are in compliance with FACTA.From what I can tell, there will be another slew of FACTA-related lawsuits aimed at merchants who don’t comply with the laws of FACTA and the Clarification Act.These lawsuits have already begun.

This Banking Expert Witness Consultant has worked on over 50 FACTA cases nationwide and is available to discuss FACTA matters with attorneys, through Consolidated Consultants Co.