Frager Factor

Tuesday, April 09, 2013

The Massachusetts Supreme Court Has Ruled Against Marchex


Massachusetts to Retailers: ZIP Codes Are Personal Info
Retailers Can't Require ZIP Codes For Credit Card Transactions, Says State Supreme Court
   
The Massachusetts Supreme Court has ruled in a case against craft supplies purveyor Michaels Stores, deciding that ZIP codes are personally-identifiable information.
It's become commonplace for bricks-and-mortar merchants to ask shoppers for their ZIP code when they pay with a credit card (and even sometimes when they use cash). The court decision, and others like it on the books in California and a handful of other states, have some privacy lawyers suggesting retailers change their ways when it comes to collecting ZIP codes.


The Massachusetts court last month ruled in the class action suit that collecting personal information when conducting a credit card transaction violates state privacy law. In this case, it wasn't about data security or fraud. Rather, plaintiff Melissa Tyler argued that when Michaels Stores matched her ZIP code collected by a cashier with other data to retrieve her mailing address and phone number to target marketing communications to her, it violated an existing law prohibiting entities from requiring personal information when paying with a credit card.

"These rules that you can't collect ZIP codes are in laws regulating the use of credit cards," said Thomas Smedinghoff, partner at Edwards Wildman Palmer, regarding the Massachusetts and California laws. "I think we're going to see more of this in part because of the growing number of studies that indicate how easy it is to identify someone with very limited amounts of information," he said.

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