FACTA: The Consumer Law that protects your Money & Identity

No comments

credit card transaction laws

Ask a friend:

“What is the Fair and Accurate Transactions Act? (FACTA)”

…and they might stare at you blankly.

What they probably do not know is that…

…this little consumer-rights law:

Protects every one of us from having our money (and identity) stolen when it comes to credit card receipts…

In this article, you will find out in simple terms, how this consumer law keeps your privacy and money safe.


What you should be looking out for when making a purchase (even when buying a coffee and a bagel) to be sure your personal information is not at risk.

Because It happens more often than you think.

And next time…

When someone asks you:

“What is The Fair and Accurate Transactions Act? (FACTA)”

You will be able to give them a better answer than most people.

Let’s begin.

What is FACTA

The Fair and Accurate Transactions Act (2003) is a federal consumer-rights law that regulates how businesses manage sensitive financial data during financial transactions.

It’s primary purpose:

To protect you, the consumer, from credit fraud and identity theft.

There are two primary stakeholders to the Fair and Accurate Transaction Act, each with their rights and responsibilities:

They are:

  1. Businesses
  2. Consumers

Let us look more at each.

Starting with…

FACTA & Businesses.

Businesses have to be especially careful when dealing with the FACTA.


Violating this law can be a costly lesson.

In fact:

Subway just paid a settlement of 30.9 million dollars in FACTA violations, which they could have avoided.

Read on.

If you are a business owner (or manager), keep this in mind:

When setting up your credit card machine, make sure to follow the FACTA guidelines “to the T” of what can – and cannot – be printed on customer receipts.

In case you are not sure what’s allowed…

I will go over all of this in the upcoming chapter.


Even if you do not own a business, make sure to check every receipt handed to you for these violations. They could put you at risk of identity theft or credit fraud.

FACTA guidelines to keep in mind around credit card receipts:

Allowed Personal Account Information

The law only allows businesses to reveal the last five digits of a consumer’s card information on the customer’s receipt or invoice copy.


They must never reveal your expiration date.

If you ever receive a receipt from any business that reveals more than the last 5 digits, your identity and money could be at risk.

For example:

Let us say your full credit card (or debit card number) is: 4444 3333 2222 1111.

Here is an example of what a business can print on your receipt:

As you can see, only the last five digits of the MasterCard’s number are showing.


They would be in violation of the FACTA if your receipt looked like this:


The “33’s” are not amongst the final five digits.

There are many ways a business can wrongly display information on the customer’s receipt.

Here are some more examples:

What SHOULD NOT Be Printed on a Customers Receipt

Here are a few examples of information you may see on your receipt that is in violation of Fair and Accurate Transactions Act (2003).

(All our examples are using a MasterCard with the number 4444 3333 2222 1111 and Expiration date August 2018.)

Example 1: MC **** **** **22 1111

Example 2: MC 44** **** **** 1111

Example 3: MC **** **** **22 ****

Remember: Even when the receipt shows less than 5 digits, if they are not of the last five digits, it is still illegal.

Expiry Date FACTA Violations Examples

Expiration information is a definite No-No.

Businesses must not print your card’s expiry date on your copy of the receipt.

If they do…

They are in violation of the FACTA. Here are some examples of what you may find on your receipt

(None of the following examples are allowed)

Example 1: 08/18

Example 2: 0818

Example 3: Exp. Date 08/**

(even partially revealing your expiry date is a FACTA violation)

Example 4: EXP. **/18

Example 5: EXP: 0818

Example 6: EXP: 082018

Example 7: EXP: 08/18

Example 8: EXP: 08/2018

Example 9: EXPIRY: 08/18

Example 10: Expires: 08/18

Example 11: Exp Date: 08/18

Example 12: Exp Date: 08/31/18

All sensitive data, if printed on a receipt (other than what is accepted according to the FACTA) must be truncated.

This leads us to…

What is Truncation?

Truncation is when alphabetical or numerical values are replaced with “truncation symbols.”

The purpose of truncation is to protect your privacy.

You see truncation every day:

When you type in your password in Gmail, Facebook, or any other website, each character and symbol is replaced by a small black dot…

That is truncation.

The most common truncation symbols are:

  • Question Marks: (?)
  • Stars (*)
  • Bullet points (•)
  • Dollar signs ($)

PAN Truncation

You might be wondering…did he misspell “PIN”?

I didn’t.

Personal Account Number (PAN) Truncation is a type of truncation (symbol replacement) where your banking or card account numbers are truncated to protect sensitive financial and personal data.

This most commonly occurs on credit card statements where stars *** are used, instead of showing your account or card numbers.

These measures reduce your risk of experiencing credit card fraud and identity theft.


What happens if a business violates FACTA?

If a business (large or small) is caught doing the wrong thing:

They could face FACTA fines of between $100 to $1000 per violation.

It’s not hard to do, either.

All it takes for a business to violate the FACTA is to make a mistake while programming their credit card machine and neglect to fix the problem.

Here’s an example:

Imagine there is a coffee shop franchise, called Café Del.

Mario, a new Café Del franchisee, carelessly programmed his new credit card scanner incorrectly. He knew he should have set it up more carefully but did not think it was a big deal to show a card’s expiry date on a customer’s receipt.

Fatal error #1

Mario went on with his business, serving coffee and bagels to over 100 customers a day.


About a year later, he gets word from the head office that there is a class action suit against Café Del, and that the complaints are about his location, Café Del Mario!

With nearly all of his customers paying by credit card, Mario’s mistake had escalated to:

100 receipts x 365 days = 36,500 FACTA violations.

The franchise’s lawyers (understandably upset) explained to Mario that this could potentially cost the franchise and Mario up to $1,000 x 36,500 = $36.5 Million dollars in penalties.

All because Mario wasn’t careful.

If you think the number is hyperbolic…

…It is close to the recent actual case in which Subway paid a $30.9 million dollar settlement for their FACTA violations.

It is not just cafés and sandwich shops who are neglecting their duty to protect their customer’s private information. There are companies from all industries who have violated the FACTA.

Recent Notable FACTA Cases

UCLA – July 2017

Even universities are subject to the FACTA. Between 2012 to 2016, the UCLA willingly printed receipts in violation of the Fair and Accurate Transaction Act 2003. Now they are facing a class action lawsuit which could cost them millions.

Microsoft – February 2017

Last year, Microsoft had to pay a $1.2 million dollar settlement after accidentally sharing too much of their clients’ information on credit card receipts in Microsoft stores.

Jimmy Choo – February 2017

The luxury shoemaker was taken to court over misprinting their credit card receipts. They chose to settle the case for $2.5 million dollars after briefly trying to dispute the claim.

Consumers Rights

At the end of the day…

This law is here to protect you, the innocent consumer, from others taking your hard-earned money or using your identity in malicious ways.

The Fair and Accurate Transaction Act awards you certain rights to help:

Protect you from malicious activity using your personal account information…

Plus provide ways to keep a better eye on your accounts and spot anything suspicious going on.

That way…

You can live your life with a clear mind, knowing the law is there to protect your best interests.

Here is how the FACTA helps you, the consumer:

Free Credit Reports

The FACTA gives you the right to receive a yearly FREE credit report from any of the largest credit agencies in America.


Equifax, Experian, and Transunion

Checking your credit report annually is the best “first defense” against credit fraud.


Because, your credit report provides details of every account in your name, loans you have made (or made in your name) and debt collections information.

The great thing about keeping an eye on your credit report is that you are quickly able to identify fraudulent activity being carried out under your name.

That way, you can immediately contact the banks or lending bureaus who initiated the fraudulent accounts and inform them that you did not open an account or line of credit with them.

If you would like to request a free credit report, here is the website to get one.

What is a Fraud Alert?

A fraud alert is a notification accompanying your credit report and credit rating that alerts the reader that fraudulent activity has been conducted under your name.

The instant you suspect that you may be the victim of credit fraud:

Ask your reporting agency to place a “fraud alert” on your credit file. This will stay there for a minimum of 90 days from the initial report of suspicious activity.

Don’t worry. A fraud alert will not make your credit look bad, quite on the contrary. Here’s what happens when you have a fraud alert attached to your credit report:

What does a Fraud Alert Do

As soon as you have a fraud alert on your credit report, it becomes much harder for scam artists to do anything with your details.


No one using your credit files – such as banks or lending institutions are able to:

  • Open a new account in your name
  • Extend your credit
  • Open a new loan in your name
  • Etc.


They can verify with all certainty that you are the person you say you are.

This makes it incredibly difficult for the average scam artist to steal your identity or your money.


The FACTA is a little known but useful consumer-rights law that protects consumers’ information from slipping into the wrong hands.

It protects you and places restrictions and regulations on businesses, credit bureaus, and financial institutions to reduce the risk of credit fraud and identity theft.


Now you have a much better answer to the question:

“What is FACTA?”

If you see any business that is violating the fair and accurate transaction act by providing the wrong information on your receipt, call us.

Jordan ShawFACTA: The Consumer Law that protects your Money & Identity

Leave a Reply

Your email address will not be published. Required fields are marked *