FACTA Litigation Update: Fair Credit Reporting Act Class Actions Seek Staggering Damages Awards

Since December 2006, plaintiffs’ class action firms in California and elsewhere have filed over 200 nationwide class actions in federal court against a broad spectrum of retailers and restaurants alleging violations of the Fair and Accurate Credit Transactions Act ("FACTA"). In addition to California federal courts, FACTA cases have been filed recently in federal courts in Pennsylvania, Illinois, New Jersey, Nevada, Maryland and Kansas. FACTA added sections to the federal Fair Credit Reporting Act ("FCRA," at 15 U.S.C. § 1681 et seq.) as of December 4, 2003. The lawsuits specifically allege "willful noncompliance" (15 U.S.C. § 1681n) for claimed violations of 15 U.S.C. § 1681c(g), the so-called "truncation" provision of FACTA. The timing of these suits coincides with the second and final phased-in effective date of FACTA’s truncation provision; i.e., a December 4, 2006 effective date for receipts electronically printed by cash registers and similar point-of-sale machines placed into