Truncation is a requirement imposed by the Federal Trade Commission (FTC) for retailers to cut down on personal information on the account that is printed on debit and credit card receipts.
The requirements for truncation are outlined within regulations for the Fair and Accurate Transparency Act (FACTA) of 2003, a law which modified and expanded to the Fair Credit Reporting Act of 1970. FACTA was focused in preventing the theft of identity through protecting personal data of consumers as well as sensitive financial data.
According to FACTA companies that accept debit or credit cards are not allowed to print more than the final five digits of the card’s numbers in their invoices. This rule, which went in effect on Dec. 1st, 2006, is intended to protect the customers from fraudulent use of credit cards as well as the theft of their identity. 1
The requirement to cut off card numbers is only applicable to receipts given by the customer at point-of-sale. This does not apply to the digital transaction records kept by the retailer. In general, merchants keep an additional copy of each receipts that include the customer’s complete credit card details. Merchants are allowed to keep and record the information they collect under FACTA however they must ensure that their records are secure and stored in a safe manner and that the security of their customers’ data is protected. 2
Under FACTA the merchant could be held liable for damages up to $1,000 per infraction to the rule. 3 These damages are available regardless of whether or not the act caused harm to the consumer, a situation that has led to numerous individuals as well as collective action cases against businesses of any size for violations of truncation during the time since the law was implemented. Since then, a few judges have held that it is necessary to prove of actual damage caused by the violation to allow the business to be punished.
A Truncation Example
However, the the theft of credit card data remains a significant issue, impacting millions of customers every year. According to a report from the FTC the FTC, there were greater than 1.3 million instances of identity theft in the year 2020 which is more than three times the amount of cases in the year 2018. 4 Thieves are able to use stolen data in various ways, including making online purchases, open the account of a credit card, or offering it for sale on the black market.
If it weren’t for truncation thieves could steal a lot of the data they require to commit these crimes by stealing or locating discarded receipts from customers. Truncation can make it more difficult for criminals to get the information. It is worth noting that the requirement for truncation is not applicable to handwritten or manual imprinters. receipts. This makes it even more crucial to store and remove these kinds of documents.