Page 16 - The Connection Bernards-Ridge Edition September 2013
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PAGE 16
THE BERNARDS-RIDGE CONNECTION
SEPTEMBER 2013
D
I
S
ABATO
&
B
OUCKENOOGHE LLC
-
A
TTORNEYS AT
L
AW
-
4
H
ILLTOP
R
OAD
M
ENDHAM
,
N
EW
J
ERSEY
07945
973.813.2525
www.disabatolaw.com
GETTING OFF THE RETAIL ZIP-LINE
By: David J. DiSabato, Esq., DiSabato & Bouckenooghe LLC
Who doesn’t love thumbing through a
brand new Williams Sonoma catalog when
it shows up in the mailbox? But did you
ever wonder how you ended up on their
mailing list? Well it all starts when that
perky clerk at the cash register asks you for
your ZIP code. These days, we almost
expect retail cashiers to ask for our ZIP
codes when we make a purchase. But
guess what? It’s illegal to do so.
New Jersey outlawed this practice in 1991
when it enacted “Restrictions on Informa-
tion Required to Complete Credit Card
Transactions” (N.J.S.A. 56:11-17), which
prohibits a retailer from requiring a con-
sumer to provide any personal identifica-
tion information that is not necessary to
complete a credit card transaction. The pur-
pose of this statutory restriction is to ensure
that retailers do not use the veil of a credit
card transaction to gather personal infor-
mation for marketing purposes.
The big deal about collecting ZIP codes is
that retailers use sophisticated customized
software to perform reverse searches from
databases that contain millions of names,
e-mail addresses, telephone numbers and
street addresses and that are indexed in a
manner resembling a reverse telephone
book. The software then matches the con-
sumer’s name and ZIP code with the con-
sumer’s previously undisclosed address, giv-
ing the retailer the private and personal
marketing information it seeks. Retailers
then use their databases to market prod-
ucts to customers and may, in some
instances, sell this private information to
other third parties.
Class action lawsuits relating to the har-
vesting of ZIP codes began popping up a
few years ago in California. The first one to
go the distance was against (you guessed
it!) Williams Sonoma. That case definitively
held that ZIP codes constitute protectable
private information and that asking for
them in connection with a credit card trans-
action was illegal under California law.
Many other states, including New Jersey
and New York, have similar laws. Dozens of
retailers across the Country have been sued
for allegedly collecting ZIP codes in viola-
tion of the law. These include Walmart,
Bed, Bath and Beyond, Michaels Stores,
Guitar Center, Urban Outfitters, Kohls and
Walgreens, to name just a few.
While the New Jersey Legislature did not
provide for a private right of action under
N.J.S.A. 56:11-17, a violation of the statute
gives rise to liability under other consumer
protection statutes that do allow for private
rights of action, some of which allow for a
consumer to recoup $100 in statutory dam-
ages for each violation. Moreover, the Attor-
ney General has the authority to collect a
$250 to $1000 penalty for each violation.
There are a few exceptions to the law. For
example, gas stations are exempt from the
prohibition for security reasons. And Amer-
ican Express frequently requires retailers to
request ZIP codes as part of AmEx’s identity
verification process, which makes the ZIP
code request “necessary” to complete the
retail transaction, and, therefore, exempt.
But your run of the mill VISA and Master-
Card transactions do not require a ZIP and
you should not be asked to provide one.
So what can you do? You can “just say no”
or – better yet – you can ask the clerk why
he needs your “Zone Improvement Plan”
code. Chances are that unless he just wrote
an article on ZIP code class actions, he’ll
have no idea what you’re talking about!
DiSabato & Bouckenooghe LLC is a con-
sumer protection law firm located in Mend-
ham, New Jersey. For questions or to learn
more, go to www.disabatolaw.com.
www.theconnectionsnj.com
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