Credit and Debit Cards Receipt Clarification Act of 2007

CREDIT AND DEBIT CARDS RECEIPT CLARIFICATION ACT OF 2007 -- (Extensions of Remarks - May 14, 2008)

SPEECH OF
HON. CAROLYN B. MALONEY
OF NEW YORK
IN THE HOUSE OF REPRESENTATIVES
TUESDAY, MAY 13, 2008

* Mrs. MALONEY of New York. Mr. Speaker, I rise in strong support for H.R. 4008, the Credit and Debit Card Receipt Clarification Act. This is common sense legislation that will free hundreds of businesses, from large corporations to ``mom & pop'' operations from legal damages that could total hundreds of millions or even billions of dollars for their harmless failure to redact expiration dates from their credit and debit card receipts.

* This bill only provides relief to companies that otherwise complied with the Fair and Accurate Credit Transaction Act, also known as FACTA, it preserves the right for a customer to sue if real harm or fraud has occurred and it does not eliminate a business's obligation to properly truncate the account number or to redact the expiration date from its receipts.

* I think it is important to point out that we are talking about businesses that did everything they thought they were required to do to comply with the new standards set forth by FACTA. These are businesses that purchased new machines, installed new hardware and incurred the expense of producing what they thought or were told was a compliant credit or debit card receipt. These are businesses that when they were told that they had to truncate the account numbers of credit and debit cards, they did so.

* One of my constituents, Steven Hanson, is such a business owner. He is the founder and President of B.R. Guest Restaurants. After FACTA was enacted into law, Steve tells me that he and his company spent more than $300,000 switching out credit card terminals in his restaurant to comply with the new law, only to find out that each and every new receipt he processed could result in a $100 to $1,000 fine. Steve tells me that B.R. Guest has a pending lawsuit against his company that could result in a $100 million liability. This is not a liability that B.R. Guest or many businesses could absorb. Without this relief, B.R. Guest and hundreds of other businesses could be forced to close up shop.

* In addition to B.R. Guest Restaurants, Zabars, Fairway Markets, Scholastic Books, Barneys/Jones Apparel Group, Estee Lauder, The Knot.com, Bally's North America, Buy Buy Baby and Ross Stores are among the New York Businesses named in similar lawsuits.

* It is also important to note that while the lawsuits filed against these companies are seeking damages totaling in the hundreds of millions, if not billions of dollars, none of the 500 lawsuits that have been filed, make any allegation of consumer harm. Identity theft prevention experts have testified that the truncation of the credit card numbers accomplishes the intent of the statute because a potential fraudster would not be able to perpetrate account fraud without having the entire correct credit card number. The real harm to the consumer would come if Congress does not act. Consumers will be forced to pay higher prices to help these businesses absorb the cost of these lawsuits or will be faced with fewer options as businesses are forced out of business because they can not afford their cost.

* This legislation enjoys wide bipartisan support and has been endorsed by The U.S. Chamber of Commerce, the National Restaurant Association, Retail Industry Leaders Association, The National Association of Theater Owners, The International Franchise Association, The National Council of Chain Restaurants and the Food Marketing Institute.

* Mr. Speaker, as I said, this is common sense legislation and I urge its adoption.

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