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Plaintiff's Lawyers Start Suing Retailers Over Zip Codes

By Jason Beahm on March 01, 2011 | Last updated on March 21, 2019

Plaintiff's Lawyers wasted no time jumping on top of California businesses that are not complying with a California Supreme Court ruling that stated that ZIP codes are "personal identification information," meaning that requesting them from consumers is illegal.

The decision came in a case last week against Williams-Sonoma Inc. Over a dozen lawsuits have already been filed, the LA Times reports. Already in the crosshairs of plaintiff's attorneys: Wal-Mart, Bed Bath & Beyond, Crate & Barrel and Victoria's Secret.

This could be big news for you if your firm takes plaintiff's cases or defends against them. You should also advise any businesses that you represent to make sure they no longer collect ZIP codes, unless they meet certain exceptions, such as gas stations that require it at the pump.

"A lot of the people we talked to felt very uncomfortable giving the ZIP Code but felt they had to ... They felt they were in the middle of a transaction and weren't going to tell the sales clerk no," said Eric Schreiber, who, said he took the cases because the invasion of privacy that consumers are facing regarding ZIP Codes is wrong. Schreiber and other attorneys are going after California retailers, seeking class-action status.

Retailers were apparently caught off guard by the decision and many had not changed their business practices. That may turn out to be an expensive mistake. A first violation costs a maximum of $250, with subsequent violations costing a maximum of $1000 each. The actual penalties would be determined by a judge, but cumulatively, the risk of exposure to businesses is in the multi-millions.

The cases involve a provision of the Song-Beverly Credit Card Act of 1971. Under the Song-Beverly Credit Card Act, California merchants cannot record "personal identification information." Obviously that is a bit vague, but the court found that the privacy risk of collecting ZIP codes is too substantial to be allowed.

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