On January 24, 2012, the United States Court of Appeal for the Third Circuit ruled that printing just the month of a credit card’s expiration date on a customer receipt violates the federal Fair And Accurate Credit Transactions Act (FACTA). This is the first federal appeals court to address this issue and confirms that retailers may face significant exposure if they include any credit card expiration information (no matter how small) on a customer receipt.
The Court’s decision was in Long v. Tommy Hilfiger U.S.A., Inc., a nationwide class action filed against Tommy Hilfiger USA Inc. in Pennsylvania. The plaintiff sought statutory damages, punitive damages and attorneys’ fees based on the allegation that Tommy Hilfiger included a credit card expiration month (but not the year) on customer receipts. FACTA provides for statutory damages of up to $1000 for “willful” violation of the Act. Punitive damages and attorneys’ fees are also available for a “willful” violation regardless whether the consumer suffered any damages.
Although the Court of Appeals held that the inclusion of the expiration month on a receipt violated federal law, the Court nevertheless dismissed the plaintiff’s case after concluding that Tommy Hilfiger’s conduct was not “willful” and thus did not give rise to any relief sought by the plaintiff. The Court held that Tommy Hilfiger’s belief that FACTA did not prohibit printing the expiration month was objectively reasonable because FACTA does not explicitly prohibit the conduct, and even the lower court had interpreted the statute as permitting such conduct.
Tommy Hilfiger’s ultimate win should nevertheless serve as a caution to other retailers. The Court’s decision will likely be relied upon in the future for its broad interpretation of prohibited conduct under FACTA as well as its notice to retailers of this interpretation.