California’s Supreme Court ruled in favor of greater cardholder privacy this week in a decision that will likely affect many state consumers when they make credit card purchases.
In a unanimous ruling, the seven judges of the state’s high court found that retailers do not have the right to ask consumers to supply their ZIP code when completing credit card transactions.
The decision, which stems from a class-action lawsuit against home retailer Williams-Sonoma, overturns an earlier legal precedent from 1971. This prior ruling stated that consumers could not be asked for personal information that may be used to track them, CNN reports.
[Resource: 12 Tips for Protecting Your Identity]
In the case, Jessica Pineda was asked for her ZIP code by Williams-Sonoma. The company then sold information compiled from its customers to other sources who used it to get her home address. Retailers may still ask for this information under the new decision; however, they will be barred from recording it or storing it in a database.
However, while many consumers will likely approve of the decision due to its stance on privacy, some experts are displeased with the outcome, the news source says.
“We think it’s a terrible decision because it dramatically expands what personal information is, by including a ZIP code as part of an address,” Bill Dombrowski, president of the California Retailers Association, told CNN. “We are surprised by it.”
However, the ruling would allow for ZIP codes to be collected by merchants in certain scenarios, such as at gas station pumps where it is used for security reasons. The law also specified that this information would remain required for bank deposits and cash advances, The Los Angeles Times reports.
While the new ruling would only affect credit card users in California, it echoes similar legislation that has been enacted in other states.