California Supreme Court Holds That Businesses May Not Request And Record Consumers’ Zip Codes For Credit Card Transactions

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On February 10, 2011, the California Supreme Court unanimously ruled that businesses subject to California law may not ask credit card users to provide their ZIP code and record such ZIP code in the course of credit card transactions.1 The court’s decision has a retroactive effect, allowing for class actions with statutory damages of up to $250 for a first violation and $1,000 for each subsequent violation per class member, under the Song- Beverly Credit Card Act of 1971, Civ. Code Section 1747 et seq. (Song Act).

California’s Song Act provides privacy protections for credit card users, including a prohibition on businesses gathering “personal identification information” in connection with credit card transactions.2,3 The Song Act defines “personal identification information” as “information concerning the cardholder, other than set forth on the credit card, and including, but not limited to, the cardholder’s address and telephone number.”4

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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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