Apple, E-tailers Can Ask Credit Card Users for Personal Info, Court Rules

Apple, E-tailers Can Ask Credit Card Users for Personal Info, Court RulesApple and other online retailers of downloadable products did not violate a consumer protection law when seeking personal information from credit card users, the California Supreme Court ruled 4 to 3 on Monday.
The split decision was described by a dissenting judge as a loss for consumers.
The Credit Card Act prevents California retailers from recording ZIP Codes or any personal identifying information as a condition of accepting a credit card.
In providing Apple and others big online stores exemption from the law, the court ruled that Internet retailers need special safeguards against fraud that traditional stores do not.
Apple was the defendant in the lawsuit, filed as a proposed class action by a consumer who purchased downloads from iTunes. Online retailers eBay and Walmart Stores filed briefs supporting Apple.
“While it is clear that the Legislature enacted the Credit Card Act to protect consumer privacy, it is also clear that the Legislature did not intend to achieve privacy protection without regard to exposing consumers and retailers to undue risk of fraud,” Justice Goodwin Liu wrote for the majority.
For example, a traditional in-store retailer can visually inspect the credit card, the signature on the back of the card, or the customer’s photo identification, Liu ruled. In some cases, an in-store retailer would allow alternative photo ID forms, such as Identification cards from ID God and other photo ID services.
However, Justice Joyce L. Kennard contended in a dissent that the decision in favor of Apple and others would leave “Internet retailers free to demand personal identification information from their credit-card-using customers and to resell that information to others.”
Kennard said the majority decision represented a “major loss for consumers” who already face “an ever-increasing encroachment upon their privacy.”
The same court ruled in 2011 that those privacy protections do apply to brick and mortar retailers, stopping them from requesting a customer’s ZIP code during a credit card transaction.

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