Consumer Protection: First Circuit Holds that ZIP Codes Are Private Customer Information Protected By Statute

ZIP codes are personal identification information under Mass. General Law c. 93, § 105(a), which prohibits writing such information on credit card transaction forms. Tyler v. Michaels Stores, Inc., 2012 WL 32208 (2012).

Summary: As a matter of first impression, the First Circuit completed its construction of G.L. c. 93, § 105(a), which prohibits any entity from causing personal identification information to be written on a credit card transaction form when such information is not required by the credit card issuer and is not required for shipping, delivery, or installation. The Plaintiff in the case was asked for her ZIP code by a sales employee at Michaels Arts & Crafts when she made a purchase. Michaels used this information in conjunction with a commercial database to locate customers’ full address and send them unsolicited marketing materials. The Court held that Michaels’ action constituted a violation of § 105(a), but also held that the Plaintiff failed to sufficiently allege a causal connection between Michaels’ violation of the statute and any cognizable injury necessary for recovery under G.L. c. 93A, § 9(1). The Court also held that the Plaintiff failed to sufficiently allege a claim for unjust enrichment.

Discussion: The Court held that a ZIP code can constitute a personal identification information under Section 105(a) because it may be necessary to the credit card issuer to identify the card holder in order to complete a transaction, meaning that a ZIP code can potentially be used to assume the identity of the individual for fraudulent purposes. The Court also held that a retailer’s electronic card terminal at the point-of-purchase may contain a credit card transactional form within the meaning of Section 105(a), regardless of whether such form is electronic or paper.

However, the First Circuit held that the Plaintiff failed to allege a cognizable injury because there was no allegation that Michaels’ deceptive act caused her unreasonable risk of fraud, put her in a worse and untenable position, or diminished her creditworthiness. The Court further held that receiving unwanted commercial advertising in the mail was the not a cognizable injury under 93A, since Section 105(a) was enacted to prevent fraud, not harassment.

Unjust enrichment typically implies a circumstance in which reasonable people would expect payment by the defendant to the plaintiff for some benefit conferred by the plaintiff on the defendant. Court rejected the Plaintiff’s unjust enrichment claim because she did not sufficiently argue that a reasonable person would expect compensation for providing a ZIP code to a merchant, or that had she been fully informed, she would have requested payment for divulging her ZIP code.

Implication: To prove a violation of § 105(a) – credit cards; checks; personal identification information – the Plaintiff had to show that the Defendant (1) wrote or caused to be written, (2) personal identification information, (3) on a credit card transaction form, (4) which information is not required by the credit card issuer.

105(d) provides that “any violation of the provision of [105(a)] shall be deemed to be an unfair and deceptive trade practice as defined in section 2 of chapter 93A.

Under 93A, a successful claim requires a showing of (1) a deceptive act or practice on the part of the defendant; (2) an injury or loss suffered by the consumer; and (3) a causal connection between the defendant’s deceptive act or practice and the consumer’s injury.

To succeed in a claim for unjust enrichment, a plaintiff must show (1) a benefit conferred upon the defendant by the plaintiff; (2) an appreciation or knowledge by the defendant of the benefit; and (3) acceptance or retention by the defendant of the benefit under circumstances inequitable without payment for its value.

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