Tuesday, May 5, 2015
Court of Appeal Says Credit Card Privacy Statute Is Inapplicable Where Transaction Is Begun Online
By a MetNews Staff Writer
A statute that bars a merchant from requiring a credit card user to disclose personal identifying information does not apply when the transaction was commenced online, even if it was completed at the merchant’s retail location, the Court of Appeal for this district ruled yesterday.
Div. Two affirmed a grant of summary judgment in favor of Beverages & More, Inc., holding that the company did not violate the Song-Beverly Credit Card Act by requiring a customer who ordered goods for in-store pickup to provide his address and telephone number online.
Michael Ambers brought a putative class action against the liquor retailer, whose demurrer was sustained by Los Angeles Superior Court Judge Jane Johnson. The judge agreed with the defendant that Apple Inc. v. Superior Court (2013) 56 Cal.4th 128 was analogous.
The high court held in Apple that the relevant code provision, Business and Professions Code §1747.08(d), did not apply to an online purchase transaction in which the merchant needs personal identifying information to prevent fraud.
Justice Victoria Chavez, writing for the Court of Appeal, acknowledged that Apple was not directly on point because the transaction in that case was completed entirely online. “The court’s reasoning and analysis in Apple, however, apply here with equal force,” she concluded.
“Like the online retailer in Apple, BevMo had no means, without obtaining plaintiff’s PII, of verifying that plaintiff was an authorized user of the credit card number entered on BevMo’s website before the purchase transaction was completed,” the justice reasoned. “Such verification was necessary in Apple because upon completion of the online transaction, the buyer acquired the right to immediately download and begin using the purchased media items. Such verification was also necessary in the instant case because ownership of the merchandise purchased on BevMo’s website passed immediately to plaintiff upon completion of the online transaction, when plaintiff’s credit card was charged.”
Chavez noted that, according to the website, title to merchandise ordered online passes to the buyer at the time of purchase, and not when the buyer takes physical possession. Ambers, she said, thereby explicitly waived the protection of Commercial Code §2401(2), under which a sale is deemed incomplete until the goods change hands.
The requirement that the purchaser provide the credit card and proof of identity at the time the merchandise is picked up is not a sufficient substitute for providing the information at the time of the online transaction, the justice added.
“Plaintiff’s argument overlooks the fact that he became the owner of the purchased items when his credit card was charged upon completion of the online transaction,” Chavez explained. “Had the transaction been a fraudulent one, BevMo would have no recourse except to unwind the transaction and reclaim title to the fraudulently purchased merchandise. The availability of such an ex post facto remedy is not the same as the antifraud protection provided by section 1747.08, subdivision (d) to a brick and mortar retail sale.”
The case is Ambers v. Beverages & More, Inc., 15 S.O.S. 2184.
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