California's high court ruled Thursday that retailers don't have the right to ask customers for their ZIP code while completing credit card transactions, saying that doing so violates a cardholders' right to protect his or her personal information.
Many retailers in California and nationwide now ask people to give their ZIP code, punching in that information and recording it. Yet California Supreme Court's seven justices unanimously determined that this practice goes too far.….The discussion began with a June 2008 class-action lawsuit filed initially by Jessica Pineda against home retailer Williams-Sonoma.
In her suit, Pineda claimed that a cashier had asked for her ZIP code during a purchase -- information that was recorded and later used, along with her name, to figure out her home address. Williams-Sonoma did this tapping a database that it uses to market products to customers and sell its compiled consumer information to other businesses.
Pineda contended the practice of asking for ZIP codes violates a person's right to privacy, made illegal use of her personal information and gave a retailer, like Williams-Sonoma, an unfair competitive advantage.
Williams-Sonoma, for its part, claimed that a ZIP code doesn't constitute "personal identification information," as stated in the 1971 state law….It is not illegal in California for a retailer to see a person's ZIP code or address, the ruling notes: For instance, one can request a customer's driver's license to verify his or her identity. What makes it wrong is when a business records that information, according to the ruling, especially when the practice is "unnecessary to the sales transaction."
In reversing the Court of Appeals judgment, the Supreme Court remanded the case back to a lower court to order specific changes and policies "consistent with this decision."
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…more from the USBSI news desk later.