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Wednesday, February 8, 2012 11:37 EST |
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Credit Card Account Number TruncationWith identity theft and fraud on the rise, steps have been taken by Visa and Mastercard to try to alleviate this problem. The two credit card giants have passed regulations that require merchant accounts to truncate credit card numbers on printed cardholder receipts. While this may sound technical, it is really quite simple. As per Visa and Mastercard regulations, receipts printed for the cardholder must hide expiration dates and all but the last four numbers of the account number.Additionally, the Fair Credit Reporting Act (FCRA) (15 U.S.C. 1681) along with some states’ laws also require that merchant accounts truncate credit card numbers on printed cardholder receipts. There is much variation in federal and state deadlines but the deadline has already passed in some states. Check your state’s legislative website to find the truncation deadlines and specifics for your state. Business owners are responsible for merchant account compliance with the truncation regulations and must make sure that their printed cardholder receipts do not contain expiration dates or full account numbers. Visa’s requirements state that any credit card terminals deployed after July 1, 2003 must comply with truncation regulations immediately. If terminals were in use prior to that date (July 1, 2003), they must be in compliance no later than July 1, 2006. Mastercard requires that new and existing credit card terminals be compliant with truncation regulations by April 1, 2005. Meeting Visa and Mastercard’s regulations fulfills federal truncation requirements but state deadlines vary and some have already passed. Business owners should be aware of state deadlines and of their responsibility that their merchant account meet federal and state credit card account number truncation requirements. This may seem bothersome and somewhat costly, but truncation regulations will benefit both business owner and customer by reducing identity theft and fraud. Federal fines for non-compliance with truncation regulations are listed as $5,000 for the first violation, $10,000 for the second violation, $25,000 for the third violation, and $50,000 for the fourth violation. Willful or purposeful non-compliance will result in penalties of $500,000 per month. Additionally, states also have penalties for non-compliance which can be just as high as federal fines. The expense and bother of complying with truncation regulations will be justified by the reduction in identity theft and fraud. Merchant accounts will be more secure and customers will feel safer conducting business with their credit cards. |
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