According to the Wall Street Journal Law Blog, around 300 class action lawsuits have been filed since the passage of the Fair and Accurate Credit Transaction Act (FACTA). However, several corporations have been challenging these suits, citing the “annihilation defense“; according to some of the defendants, the suits have put their businesses in serious peril. One such case is Soualian v. International Coffee and Teas, which is currently before the 9th Circuit Court of Appeals, in which class certification has been denied. The 7th Circuit Court of Appeals, however, has struck down the annihilation defense in the case Murry v. GMAC Mortgage Corp.(Fastcase users click to view case).
The ease with which a consumer can sue has been the main factor in the proliferation of these FACTA suits. FACTA prohibits companies from including unnecessary credit card information, such as an expiration date, on store receipts, as a protection against identify theft. You need not prove any injury as a victim of identify theft; produce a receipt in violation of FACTA, and you have grounds to sue.
What do you think? Does FACTA make it too easy to target companies, or is it a valuable protection against identity theft for consumers? Please leave your comments below.