FACTA Suit Dismissed for Lack of Harm
A Florida court recently broke with other district courts in its circuit when it concluded that a plaintiff lacks standing to sue a defendant for mere technical violation of the Fair and Accurate Credit Transactions Act (FACTA) unless the plaintiff has been harmed. FACTA prohibits printing more than the last five digits of a credit card number or the expiration date on a receipt. In the case in question (Gesten v. Burger King Corp.) the plaintiff alleged that Burger King violated FACTA when it provided him with a receipt which identified his payment method as a debit card, identified the issuing company (e.g., Visa, American Express), and included the first six and last four digits of his account number.
Dismissing the plaintiff’s suit for lack of standing, the court relied upon the U.S. Supreme Court’s 2016 decision in Spokeo, Inc. v. Robins, which ruled that statutory violations alone are not enough to satisfy the injury requirement for standing because such alleged harms are not “concrete.” While the Gesten court acknowledged that a risk of identity theft resulting from a FACTA violation would amount to concrete harm, it sided with courts from other circuits which have held that because the first six digits of a credit card number only identify the institution that issued the card and not the consumer’s unique account number, their inclusion on a receipt does not result in a material risk of identity theft. The court further concluded that there was no legitimate risk of identity theft because plaintiff did not allege that anyone other than himself and Burger King’s employees saw the receipt.
In its decision, the Gesten court recognized its own departure from other district court decisions in the Eleventh Circuit which have held that FACTA creates a substantive right for consumers to have their personal credit card information truncated on printed receipts, the violation of which is alone sufficient harm to create standing. However, the court noted that those other decisions relied upon a line of cases which pre-dated Spokeo and were contrary to its holding. As further support for its decision, the court noted that since the enactment of FACTA in 2003, Congress has expressed concern about the number of lawsuits alleging technical violations of FACTA absent other harm.
PUTTING IT INTO PRACTICE: While this case was dismissed, it serves as a reminder that plaintiffs’ counsel continue to focus on FACTA, and companies should review their procedures to address what information is displayed on receipts.