Class Action Against Costco for FACTA Violations

In the summer of 2016, a group of disgruntled customers filed a class action lawsuit against Costco Wholesale Corporation for allegedly violating the Fair and Accurate Credit Transactions Act (FACTA). Costco customers claimed the multi-billion dollar global retailer printed too much sensitive data on their receipts.

Led by Plaintiff Emiguela Paci, the lawsuit was filed in Illinois federal court after she saw the first six digits of her American Express card printed on her receipt in addition to the last four digits. Costco moved to dismiss the claim stating that the receipts were not printed at the point of sale.

Under FACTA, merchants cannot print more than the last five digits of a customer’s credit or debit card, and they cannot expose any portion of the card’s expiration date on any electronically printed receipts when a purchase is made. These provisions are part of the “truncation” requirement companies must adhere to when following the rules of FACTA. It is one of the main protections the law offers for credit consumers against identity theft and fraud. When a company is found guilty of violating the truncation law, it can face statutory damages of up to $1000 per violation.

According to Costco, the receipts in question were not printed at the point of sale, leading them to argue that they did not violate federal credit card receipt laws. Plaintiff Emiguela Paci’s motion states that the receipt had been confirmed to have been printed within a Costco store by a machine that is part of Costco’s point of sale system. The receipt printer had a default setting on it that allowed the first six digits to be printed. Paci also alleged that Costco was aware of its receipts being noncompliant with FACTA, which is a willful violation.

Costco representatives had several other arguments, including, for example, that the first six digits of all American Express cards were the same, and therefore not harmful to print. The court has yet to decide on the case Paci v. Costco Wholesale Corp. but if the plaintiffs win, they may receive $1000 per FACTA violation.

If your sensitive credit card information has been unlawfully exposed, you too could receive a just settlement with the help of a knowledgeable FACTA attorney in Florida. Jibrael S. Hindi and his team of consumer law attorneys seek to protect consumer rights throughout Florida including Miami-Dade, Broward and the Palm Beaches. Call 844-JIBRAEL to receive a free legal consultation and discuss your case. You do not pay a dime until Jibrael and his team win for you!