In view of the importance of privacy issues to readers of GlobalPolicyWatch, we have reprinted below a blog post by Morgan Kennedy from Covington’s Washington office which appeared on the Covington InsidePrivacy blog on September 12.
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Forever 21 Faces Point-of-Sale Data Collection Class Action Lawsuit
Fast fashion retailer Forever 21 Retail Inc. faces a putative class action lawsuit alleging that the retailer violated California law by requesting and recording shoppers’ credit card numbers and personal identification information at the point-of-sale.
Forever 21 shopper Tamar Estanboulian filed the lawsuit on September 7 in U.S. District Court for the Central District of California. Estanboulian alleges that Forever 21 has a policy requiring its cashiers to request and record credit card numbers and personal identification information from customers using credit cards at the point-of-sale in Forever 21’s retail stores in violation of the Song-Beverly Credit Card Act of 1971, California Civil Code § 1747.08. The complaint further alleges that the retailer pairs the obtained personal identification information with the shopper’s name obtained from the credit card used to make the purchase to get additional personal information.
According to the complaint, Estanboulian purchased merchandise with a credit card at a Forever 21 store in Los Angeles, CA this summer. The cashier asked Estanboulian for her email address without informing her of the consequences of not providing the information. Estanboulian alleges that she provided her email address because she believed that it was required to complete the transaction and receive a receipt. She also claims that she witnessed cashiers asking other shoppers for their email addresses. Shortly after completing her purchase and leaving the store, Estanboulian received a promotional email from Forever 21.
The proposed Class would include: “all persons in California from whom [Forever 21] requested and recorded personal identification information in conjunction with a credit card transaction within one (1) year of the filing of this case.”
Forever 21 is not the only retailer that has been hit with a class action lawsuit for its data collection practices at the point-of-sale. In June 2013, a putative class action was filed in U.S. District Court for the District of Massachusetts against J.Crew Group Inc. alleging that it collected zip codes from customers when they made purchases with credit cards at its Massachusetts stores. The lawsuit also alleged that J.Crew then used that information to send unsolicited marketing and promotional materials. The court approved a preliminary settlement in June pursuant to which J.Crew will provide $20 vouchers to eligible class members, up to $135,000 in attorneys’ fees and costs, and up to $3,000 to each of the class representatives.