A new bill making its way through the California legislature aims to curb a wave of class-action lawsuits filed against retailers over the collection of customer zip codes.
More than 150 class-action suits have been filed in California since February when the state Supreme Court ruled that Williams-Sonoma had violated state law by requesting customer zip codes. The decision was the first to find the collection of zip codes illegal under the Song-Beverly Credit Card Act of 1971, which bars retailers from recording customers’ “personal identification information” and imposes a $1,000 fine per violation. The court made its ruling retroactive, exposing California merchants to significant potential liability for prior zip-code gathering.
The class actions that have followed the decision are targeting big-name retailers like Wal-Mart and Target as well as gas station companies and online merchants including Pay Pal and Amazon. Industry groups say many of the retailers that have been sued are collecting zip codes to prevent fraud or to ship customers their online orders.
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