Unredacted Card Receipt Allegations Cost Microsoft $1.2M

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By Jimmy H. Koo

Microsoft Corp. agreed to pay nearly $1.2 million to settle class allegations that its retail stores printed receipts that revealed more than the last five digits of customers’ payment cards ( Guarisma v. Microsoft Corp. , S.D. Fla., No. 1:15-cv-24326, plaintiffs’ motion for preliminary settlement approval 2/24/17 ).

The Fair and Accurate Credit Transactions Act (FACTA) requires merchants to print no more than the last five digits of credit and debit cards on receipts. Although FACTA has been in force since Dec. 1, 2004, many popular retailers continue to be caught up in receipts litigation. J. Crew Group Inc. and Jimmy Choo in 2015 faced lawsuits for alleged violations of the statute.

Unwary companies that overlook their FACTA receipt obligations face class-action law firms well-versed in FACTA that are ready to file suit as soon as one plaintiff steps forward. Keogh Law Ltd., plaintiffs’ co-counsel in the present litigation, has been active in FACTA receipt litigation from the beginning. Keogh, along with co-counsel Scott D. Owens PA and Bret Lusskin PA, stand to obtain up to one-third of the settlement through court awarded attorney’s fees.

The case is a first for Microsoft. According to the plaintiffs’ Feb. 24 motion for preliminary approval of settlement, Microsoft had no prior complaints filed against it for alleged violation of the FACTA. As a direct result of the class action, Microsoft has made sure that its retail stores are in full compliance with FACTA, the plaintiffs said.

The issue was caused by "a technical bug that we immediately fixed when it was brought to our attention," a Microsoft spokesperson told Bloomberg BNA.

Common Scenarios

Barry Goheen, litigation partner at King & Spalding LLP in Atlanta, told Bloomberg BNA Feb. 27 that recent FACTA-related allegations involve certain common fact patterns and scenarios.

The first common scenario involves brand new businesses and start-ups that use credit and debit cards but have overlooked FACTA’s requirements, Goheen said. Another common fact pattern involves established businesses that may have changed payment systems or vendors that failed to comply with FACTA, he said.

According to Goheen, following the effective date of FACTA, there were many cases filed against companies for lack of compliance with the effective date. “Because compliance wasn’t required immediately, some companies may have overlooked the requirement,” he told Bloomberg BNA. Even though the volume of FACTA litigation is now substantially lower, these cases will probably not ever go away, Goheen said.

Morgan, Lewis & Bockius LLP represented Microsoft.

To contact the reporter on this story: Jimmy H. Koo in Washington at jkoo@bna.com

To contact the editor responsible for this story: Donald Aplin at daplin@bna.com

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