Legal Developments Affecting Payment Card Data Pass Practices

On-line marketers that share their customers’ credit or payment card information with other business partners without the consumer’s knowledge or active consent – a practice referred to as a ​“data pass” – may wish to read a recently published BNA Privacy & Security Law Report titled ​“Scrutiny on Payment Card Data Pass: Raising the Profile of Personal Information Sharing Among Marketers.” Kelley Drye attorneys Alysa Z. Hutnik and Joseph D. Wilson co-authored this article, which:

• explores a rule recently announced by VISA and legislation recently proposed by Senate Commerce Committee Chairman, Jay Rockefeller (D​-​W​.Va.) entitled ​“The Restore Online Shoppers’ Confidence Act” (S. 3386), both of which restrict companies’ ability to share customer payment card information. (Visit Kelley Drye’s Advertising Law Blog for related articles on these topics);

• reviews two recently filed class actions, Ferrington, et al. v. McAfee Inc., 5:10-cv-1455 (N.D. Cal.), and Van Tassell, et al. v. United Marketing Group Inc., et al., 1:10-cv-2675 (N.D. Ill.), alleging that the data pass practices of certain on-line marketers violated numerous state consumer protection laws;

• advises on steps companies should consider taking to mitigate the risk that their data pass practices will come under FTC scrutiny; and

• discusses considerations companies should make if they find themselves the subject of a class action relating to their data pass practices.