PII at the Pump: California Now Allows Retail Gas Stations to Collect ZIP Codes for Fraud Prevention

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California recently passed Assembly Bill No. 1219, which amends the state’s Song-Beverly Credit Card Act of 1971 to create a limited exception to the Act for retail gas stations. The Act prohibits businesses from requesting that cardholders provide “personal identification information” (PII) during credit card transactions and then recording that information. In February 2011, the California Supreme Court concluded in Pineda v. Williams-Sonoma Stores, Inc. that a retailer who requests and records a customer’s ZIP code during a credit card transaction violates the Act.

Although retailers have been defending lawsuits alleging violations of the Act based on collection of ZIP codes since before the Pineda decision, the number of these lawsuits was somewhat limited by the existence of two contrary Court of Appeal decisions that held ZIP codes are not PII. Following Pineda, more than 200 lawsuits were filed, and many hoped for a legislative “fix” to make Pineda apply prospectively only or to create an exception for fraud.

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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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