Massachusetts Court Dismisses Suit but Finds Zip Code is Personal Identification Information

By Jennifer Kashatus

On January 6, 2012, the United States District Court for the District of Massachusetts granted Michaels Stores, Inc.’s (Michaels) motion to dismiss against a consumer-plaintiff who had alleged that Michaels in-store information collection practices violated Massachusetts law.  Although the Court ruled in Michaels favor, the Court did find a zip code constituted personal identification information under Massachusetts law.

Plaintiff had alleged that Michaels practice of collecting zip code information in connection with a credit card transaction violated Massachusetts law.  Under Section 105(a) of Massachusetts law, no entity “that accepts a credit card for a business transaction shall write, cause to be written or require … personal identification information, not required by the credit card issuer…”  The term “Personal Identification Information” “shall include, but shall not be limited to, a credit card holder’s address or telephone number.”  According to the complaint, Michaels requested a zip code in connection with a credit card transaction; the credit card company, however, did not mandate the collection of ZIP code information.

In noting that the legislature’s main concern in enacting the statute was to prevent fraud, the court noted that under Section 105(a), a Zip code could be deemed personal identification information.  In reaching this conclusion, the Court noted that the “input of a ZIP code during a credit card transaction is the equivalent to the input of a Personal Identification Number (‘PIN number’) in a debit card transaction,” and that a ZIP Code or PIN number could be used to fraudulently assume the card holder’s identity.  The Court therefore found that the plaintiff had alleged sufficient facts to demonstrate that Michaels violated section 105 by collecting the ZIP code.

Nonetheless, the Court ultimately concluded that the plaintiff failed to alelge a connection between the unlawful collection of the ZIP code and a cognizable injury under the law, and, therefore, dismissed plaintiff’s claim.

The Court limited its findings to whether a ZIP Code constituted personal information under section 105, which pertains to the collection of information in the context of a credit card transaction.