Customer ZIP Codes Largely Off Limits in California Credit Card Transactions

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On February 10, 2011 in the case of Pineda v. Williams-Sonoma Stores, Inc., California’s Supreme Court held that it is a violation of California law for businesses to request and record a credit card holder’s ZIP code in connection with a credit card transaction, subject to limited exceptions. Notably, the Supreme Court ruled that its decision is retroactively effective.

In June 2008, plaintiff Jessica Pineda sued Williams-Sonoma stores alleging, among other claims, that Williams-Sonoma violated California’s Song-Beverly Credit Card Act of 1971 (the Credit Card Act) when a Williams-Sonoma cashier asked plaintiff for her ZIP code during a credit card transaction. Plaintiff provided the information, believing that doing so was a condition to completing the purchase. Williams-Sonoma subsequently ran the plaintiff’s name, credit card number, and ZIP code information through computer software that conducts reverse look-up searches and traced the plaintiff’s street address – previously unknown to Williams-Sonoma; the store then stored plaintiff’s information in its database. According to the complaint, it was Williams-Sonoma’s practice to use that information for marketing purposes and for potential sale to third party businesses.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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