Banking and Finance Law Daily Technical violation of card number limitation caused no concrete injury
Tuesday, March 12, 2019

Technical violation of card number limitation caused no concrete injury

By Richard A. Roth, J.D.

A consumer who did not claim to have suffered any actual harm from a merchant’s inclusion of too much information on a credit card purchase receipt would not have suffered a concrete injury that gave him standing to sue.

A merchant that included on a consumer’s credit card receipt not just the permitted last five digits of the account number but also the first six digits would have committed a technical violation of the Fair and Accurate Credit Transactions Act, but that technical violation did not give the consumer standing to sue, according to the U.S. Court of Appeals for the Third Circuit. In the absence of actual harm, or a material risk of actual harm, the consumer would not have suffered the injury-in-fact that created federal court jurisdiction, the court said (Kamal v. J. Crew Group, Inc., March 8, 2019, Scirica, A.).

The consumer claimed that he made credit card purchases at three J. Crew stores over a period of about three weeks and that, after each purchase, he was given a receipt that included both the final four digits and the first six digits of his account number. Less than a week later, he filed a class action claiming a violation of the FACTA ban on printing more than the final five digits. The court noted that the consumer did not claim that anyone other than he and the cashier saw the receipt, that the account number had been stolen, or that he had become an identity theft victim.

The district court judge eventually dismissed the suit after rejecting the consumer’s argument that he demonstrated an injury-in-fact in two ways: the printing of the extra information, and the increased risk of identity theft that resulted from the printing.

However, the appellate court agreed with the district court judge.

Printing information alone not concrete injury. The appellate court opinion first noted that, by enacting FACTA, Congress created both a right to have credit card numbers truncated and a private right of action to enforce truncation. However, when it subsequently enacted the Credit and Debit Card Receipt Clarification Act, Congress recognized that not all truncation violations would actually cause any harm.

In Spokeo, Inc. v. Robins, the Supreme Court said that an intangible harm, such as a truncation violation, would cause a concrete injury only if it had a close relationship to a harm that traditionally would allow a suit under common law (see Spokeo, Inc. v. RobinsBanking and Finance Law Daily, May 16, 2016). This consumer could not show such a relationship.

Comparable common law actions, such as suits for unreasonable intrusion upon seclusion or for unreasonable publicity, depend on the unauthorized disclosure of nonpublic information, the court pointed out. However, the consumer did not claim that any information had been disclosed to any third parties.

Increased risk of real harm. A risk of real harm may constitute a concrete injury, the court conceded, and identity theft would be a real harm. However, the consumer simply had not demonstrated a material risk.

The possibility that a third party could steal the consumer’s identity depended on a "speculative chain of events" that included gaining access to other information, such as the rest of the account number, the expiration date, and the security code, the court said. The consumer had not claimed that this had happened or that the excess information on the receipts would enable a third party to gain access to the information.

The case is No. 17-2345 and No. 17-2453.

Attorneys: Robert A. Solomon (Fricke & Solomon PC) for Ahmed Kamal. Andrew O. Bunn (DLA Piper) for J. Crew Group, Inc., J. Crew, Inc. and Chinos Acquisition Corp.

Companies: Chinos Acquisition Corp.; Chinos Holdings, Inc.; J. Crew Group, Inc.; J. Crew Inc.; J Crew Intermediate LLC; J Crew International, Inc.; J Crew Operating Corp.; J. Crew Services, Inc.

MainStory: TopStory CreditDebitGiftCards DelawareNews IdentityTheft NewJerseyNews PennsylvaniaNews Privacy VirginIslandsNews

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