Key Decisions

July 2013 – Asking For A ZIP Code Was Permissible

(filed under: Key Decisions Archive | July 22, 2013)

Asking For A ZIP Code Was Permissible

Flores v. Chevron, USA, Inc.
(Cal. Ct. of App., 2d Dist.), filed June 20, 2013, published June 20, 2013

When customers at Chevron gas stations use their credit cards to buy gasoline, they can do so by presenting their cards to the cashier or by using automated readers at the pumps.  When they use automated readers at the pumps, in areas where there is a high incidence of credit card fraud, they may be asked to provide their zip codes.  This is as a way of reducing the chance that the card was stolen or forged.

On February 10, 2011, the California Supreme Court rendered its decision in the case ofPineda v. Williams-Sonoma Stores, Inc., 51 Cal.4th 524  (2011).  There, it held that ZIP codes constitute “personal identification information” within the meaning of the Song-Beverly Credit Card Act of 1971.  That act prohibits collecting “personal identification information” as a condition to accepting a credit card for payment.

Two weeks after the decision in the Pineda case, John Flores, filed a class action lawsuit against Chevron and other companies that operated gas stations where ZIP codes were requested for pay-at-the-pump transactions, for violation of the Song-Beverly Credit Card Act.

Shortly after Flores filed suit, the Legislature passed a series of amendments to the Credit Card Act.  It added a provision stating that the prohibition on requesting or requiring personal identification information does not apply if “[t]he person, firm, partnership, association, or corporation accepting the credit card in a sales transaction at a retail motor fuel dispenser or retail motor fuel payment island automated cashier uses the Zip code information solely for prevention of fraud, theft, or identity theft.”

Chevron moved for summary judgment based on evidence that it requested ZIP codes to help prevent fraud and that it did not retain the information once the transaction had been processed.

The trial court granted Chevron’s motion.  The Court of Appeal affirmed, finding that requesting ZIP codes to help prevent fraud at self-service islands was permissible.