California Supreme Court Finds Trouble with Credit... - Other News

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » California Supreme Court Finds Trouble with Credit Cards and Zip Codes

California Supreme Court Finds Trouble with Credit Cards and Zip Codes

Add to Favorites:
California Supreme Court Finds Trouble with Credit Cards and Zip Codes

If you slide your credit card in California to pay for a retail purchase, the Supreme Court of California has ruled that it is illegal for the retailer to ask for your zip code in conjunction with the transaction. Consumer advocates argued that retailers were collecting this information under false pretenses. Retailers countered that zip codes were collected to prevent credit card fraud. The issue is still open for debate in other states.

Marketing Purposes

Consumers say that big brand retailers are requiring them to provide their zip code when making credit card purchases. They say that the cashier is telling them that the zip code is needed to process the credit card. They believe that this is a lie and that in fact retailers are collecting the information for marketing purposes and that the data can be sold to other businesses.

Credit Card Fraud Prevention

Retailers, including Bed Bath & Beyond, Burlington Coat Factory, Gap and Kohl’s, say they collect zip codes with credit card purchases to verify that the cardholder is who they say they are. It is a common practice when processing credit card payments for the card processor to enter zip codes, names and even complete billing addresses in order to ensure that the credit card information matches the billing information that is on record with the credit card issuer. This is why consumers must enter all of this information when making an online credit card purchase.

It creates a win-win situation. It protects the retailers from processing fraudulent purchase transactions and it prevents the cardholder from having fraudulent purchases show up on their credit card statements. The 150 class-action lawsuits that are hitting the California courts, however, scream of something other than a win-win scenario.

The Ruling

When the California Supreme Court ruled it was illegal for retailers to ask credit card users for their zip codes, it opened the floodgates for class-action litigation. Most legal professionals agree that the majority of the cases will be “unfounded” and get thrown out of court. Since marketing tactics often pit consumers up against retailers and businesses, it is not surprising that the argument is ensuing. The outcome, however, will leave one side without a cause.

Add to Favorites:

Related News:

Fewer Millennials Paying Attention to Finances

Posted: August 21, 2017

In 2015 more than half of Millennials were thinking about how to turn their financial goals into a reality, but in 2016 that number dropped to 37%, according to Navy Federal's 2017 Millennials and Their Money study. They also found that ... Continue reading
Debt Could Put a Damper on Romance

Posted: August 18, 2017

Does credit health factor into romance? The answer is yes, according to the new Chase Slate 2017 Credit Outlook survey. Carrying a lot of debt could be a deal breaker for some people, with 37% saying that it could make them think less of a ... Continue reading
Voting for Discover it Student Card Design

Posted: August 17, 2017

Discover is asking college students to weigh in on the new design for their Discover it Student Card, so from now until September 21, they can vote on their favorite design on Discover's website. To get the word out, they are running a ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Match Mile For Mile: We’ll match all the Miles you’ve earned at the end of your first year. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
You could turn $150 into $300 with Cashback Match™. Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
For Excellent, Good Credit
No Annual Fee. See WebBank/Fingerhut Credit Account Terms.
For Bad Credit