When reviewing the credit card slip at a restaurant to determine the tip, do you check to make sure your privacy has been properly protected? Do you look to see if your credit or debit card number has been truncated?

Credit card truncation is the process of cutting off key components of your card number on a printed receipt to guard you from identity theft and fraud. Various states have enacted credit card number truncation laws and it is enacted federal law as a part of the Fair and Accurate Credit Transactions Act (FACTA). The law states that receipts for credit and debit card transactions may not include more than the last five digits of the card number or the expiration date.

Truncation is important to shield the consumer from losing their credit card number if they lose their receipt. It protects both the merchant and the customer by not allowing the credit card number to be printed and therefore preventing fraudulent situations. According to Visa and MasterCard Regulations, as of July, 1 2003 all newly programmed or reprogrammed credit card terminals must be truncation compliant, and as of July 1, 2006 all new and existing credit card terminals must be truncation compliant. These dates do not take into account state or federal regulations. Check your individual state regulations and FACTA for the exact and complete truncation requirements for your business.

It is a mistake for businesses to rely on their bankcard companies to take care of this because it is business who takes the credit card that will be liable for the violation of FACTA. And violations are not cheap- the first violation fine is $5,000 and ongoing violation may be fined up to $500,000 per month. In addition to federal penalties, separate penalties may be incurred under state law (currently, two thirds of the states have enacted laws regarding truncation).

Here are a few truncation basics:

• Credit card truncation rules apply only to electronically printed receipts, not manual imprinters.
• Truncation rules apply to receipts electronically printed in any format, whether a small cash register receipt or a full-page invoice that also serves as a credit card receipt.
• Truncation is required only on the customer's copy of the receipt, but the PrivacyGurus® say it is safer to truncate both copies: That way both the business and the consumer are protected.

Don't know much about truncation? It's time to find out now. Ignorance of the law is not an excuse. Protect yourself and cover your assets. Call us if you have any questions: 619-670-9462.

Darity Wesley is CEO and Legal Counsel for Privacy Solutions, Inc. a San Diego based consulting firm. Her team of Privacy Gurus® work with you to create policies and procedures to establish the expectation of privacy for your members, clients, customers, prospects, affiliates, associates, employees and vendors. You can reach her at (619)670-9462 or Darity@privacygurus.com