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Financial Services Law Insights and Observations

California Supreme Court Prohibits Businesses from Requesting and Recording Cardholder’s Zip Code

State Issues

On February 10, the Supreme Court of California reversed a Court of Appeal decision that a ZIP code does not constitute personal identification information under The Song-Beverly Credit Card Act of 1971 (Credit Card Act), instead finding that a ZIP code is part of a person’s address, which does constitute personal identification information. Pineda v. Williams-Sonoma Stores, Inc., No. S178241 (Cal. Feb. 10, 2011). In Pineda, the plaintiff was asked for and provided her ZIP code while paying for purchases with her credit card at one of Defendant’s stores, and the ZIP code was recorded. The plaintiff alleged asking for and recording her ZIP Code during a credit card transaction violated the Credit Card Act, which prohibits businesses from requesting "personal identification information" during a credit card transaction. The trial court and Court of Appeal disagreed, finding that a ZIP code, without more, does not constitute personal identification information. The Supreme Court, however, reversed the lower courts, finding that personal identification information, which includes a cardholder’s address, is intended to include all components of the address, and a ZIP Code is commonly understood to be a component of an address. The Supreme Court further stated that the Court of Appeal’s interpretation would create inconsistency and permit retailers to obtain indirectly what they are clearly prohibited from obtaining directly, since such information could be used to locate a cardholder’s complete address or telephone number.

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