RETAILER COLLECTION OF CUSTOMER ZIP CODES BANNED IN MASSACHUSETTS

The Massachusetts Supreme Court recently determined customer zip codes are “personal identification information” and that retailers are prohibited from collecting this information during credit card transactions.  Retailers collecting customer zip codes and selling the information or using the information to send unsolicited marketing materials are particularly vulnerable.  The class action lawsuit before the Massachusetts Supreme Court was against Michaels Stores, Inc. (“Michaels”).  The plaintiff (and other class members) alleged Michaels used her name and zip code to find her address and telephone number and sent unsolicited marketing materials.  Massachusetts law prohibits retailers from collecting any “personal identification information” in credit card transactions beyond that which is required by the credit card issuer. (See Massachusetts General Laws Ch. 93, Sec. 105(a)).  The court found that the purpose of the law is to protect against invasion into consumer privacy by merchants and operates to bar retailers from collecting personal identification information, which now includes zip codes.

This decision has already led to lawsuits against Williams Sonoma and Restoration Hardware in Massachusetts.  The Supreme Court of California similarly held in 2011 that retailers are barred from collecting customer zip codes in credit card transactions.  For more information about California’s law visit:http://articles.latimes.com/2011/feb/11/business/la-fi-0211-privacy-20110211.

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