Tchoboian v. FedEx: Parties Settle FACTA Class Action With Gift Cards
A settlement has been reached in a class action alleging that FedEx Office stores violated the Fair and Accurate Credit Transactions Act (FACTA) by printing receipts that reveal too many digits of consumers’ debit and credit card account numbers. See Tchoboian v. FedEx Office and Print Servs. Inc., No. 10-1008 (C.D. Cal. Nov. 29, 2012) (Order Granting Motion for Preliminary Approval). Per the Settlement Agreement, the plaintiff class members find themselves in line to receive FedEx “Store Value Cards” worth $50 each, upon submission of a valid claim form. The cards can be used on purchases of items and services related to those through which the class members encountered the FACTA violations. These include use of the store’s copy machines, computer rentals, faxes, printing, and binding. The case moved toward settlement after FedEx’s summary judgment motion was denied in November of 2011.
The proposed class at issue in Tchoboian is defined as “All consumers . . . in the United States of America who can present an original or copy of a printed FedEx Office receipt printed between April 2009 and April 2010 displaying the first two and last four digits of their credit or debit card number.” Order at 2. The FACTA provides that credit card receipts may not show more than the last five digits of the card number, nor may the receipts show credit or debit card expiration dates.
Although the Class Action Fairness Act (CAFA) heightened the scrutiny on coupon settlements such as Tchoboian, there exists a misconception that CAFA categorically prohibits such settlements. Coupon settlements are not disfavored, particularly where coupons or gift cards represent a substantial proportion of what could have been recovered at trial. There is no cap on total damages under the FACTA, and FedEx faced the possibility of fines between $100 and $1000 per violation. Such damages are available under theories of either negligence or willful violation, though if the violations are shown to have been committed negligently, plaintiffs must show that they incurred damages as a result.