Credit Lawsuit News
May 12, 2012
IKEA Credit Card Transaction Class Action Lawsuit
IkeaA federal judge has ruled IKEA must face a class action lawsuit accusing the retailer of requesting and storing customers’ zip codes when making credit card purchases.
Plaintiff Rita Medellin sued IKEA in February 2011 for allegedly violating the Song-Beverly Credit Card Act, which prohibits businesses from requesting personal identification information such customer zip codes and phone numbers as a condition to accepting credit card transactions.
Medellin claims in the class action lawsuit that an IKEA cashier took her credit card and asked for her zip code, which she gave, believing the information was necessary for completing the transaction.
IKEA tried to dismiss the class action lawsuit, arguing that customers often voluntarily provide this information in order to receive email promotions from IKEA or to participate in the retailer’s rewards program.
U.S. District Judge William Hayes rejected the argument, saying the possibility of the class including customers who voluntarily gave their personal information to IKEA should not prevent the class action lawsuit from moving forward.
“The Song-Beverly Credit Card Act does not provide an exception allowing a retailer to request or require the cardholder to provide personal identification information as a condition of accepting a credit card payment when the individual has previously or subsequently provided any personal information to the retailer. Such an exception would contravene one of the purposes of the Song-Beverly Credit Card Act which is to prevent store clerks from obtaining customers' personal identification information," Judge Hayes wrote.
Hayes also ruled that a class action lawsuit would be more effective for consumers than individual lawsuits.
"Plaintiff has shown that common questions of law and fact predominate over other issues in this case on the grounds that IKEA's uniform policy and practice of requesting personal identification information from customers during credit card transactions can be evaluated to determine if the Song-Beverly Credit Card Act was violated," Hayes wrote.
Hayes certified a class of all persons from whom IKEA requested and recorded a zip code in conjunction with a credit card transaction in California from February 16, 2010 through the trial date.
The case is Reid Yeoman, et al. v. IKEA U.S. West, Inc., Case No. 11-cv-701 WQH (BGS), U.S. District Court, Southern District of California.
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