Song Beverly Strikes Again: Email Address Collection Added to Potentially Worrisome Activity

As we've previously blogged, retailers who sell products to consumers in California and Massachusetts, as well as a number of other states, run the risk of costly class action lawsuits if they collect customer zip codes in connection with purchase of goods by credit card.  The prohibitions in those states, as we've explained, often go beyond zip codes, and can include -- in California, for example -- any information that does not appear on the face of the credit card.

A recent decision by the United States District Court in California involved the collection of e-mail addresses in credit card transactions, and found against a retailer on a motion dismiss -- propelling the case to trial.  That decision adopted what some might call an inordinately expansive interpretation of the underlying law by the Supreme Court of California, and made things far worse by adding an apparent misreading of the statute to the mix.  Not for the faint of heart, but certainly important for the prudent direct marketer who hopes to avoid costly and sometimes bogus lawsuits, the decision helps underscore the risks faced by even the most diligent companies -- risks high enough that companies are often forced to settle when they know in their heart of hearts that they're right.