Fair and Accurate Credit Transactions (FACT) Act

In a recent decision, the United States District Court for the Northern District of Illinois (the "Court") held that the Fair and Accurate Credit Transactions Act ("FACT Act" or the "Act") does not violate the Due Process Clause of the Fifth Amendment or the Equal Protection Clause of the Fourteenth Amendment. Irvine v. 233 Skydeck, LLC, No. 08-C-4939 (N.D.Ill. 2009). As a result, the Court permitted consumers to proceed with a class action against 233 Skydeck, LLC ("Skydeck") — the operator of a tourist attraction in the Sears Tower called the "Skydeck".

According to the complaint, a consumer paid for admission to the Skydeck with a credit card and received a computer-generated receipt, which contained his card expiration date. The consumer filed a class action lawsuit against Skydeck for violating the FACT Act. In his complaint, the consumer does not allege that he incurred any actual damages, but seeks statutory damages, punitive damages and attorneys’ fees under the Act.

The Act states that "no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction." 15 U.S.C. § 1681c(g)(1). The Act expressly exempts from this requirement those "transactions in which the sole means of recording a credit or debit card account number is by handwriting or by an imprint or copy of the card." 15 U.S.C. § 1681c(g)(2). The Act provides for statutory damages between $100 and $1,000 or actual damages, as well as punitive damages and attorneys’ fees. 15 U.S.C. § 1681n.

In Irvine, Skydeck filed a motion to dismiss and alleged that the FACT Act is unconstitutional for the following reasons: (1) the Act violates due process because the range of statutory damages allowed for a willful violation is impermissibly vague and, combined with punitive damages, would permit "excessive" damages; (2) the Act violated due process because it permits punitive damages, in addition to statutory damages, which constitutes "double punishment"; and (3) the Act violates the Equal Protection Clause because it does not apply to handwritten or imprinted credit card receipts.Continue Reading FACT Act Does Not Violate Due Process Or Equal Protection