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California Court Rules That Online Transactions Are Not Subject to State Law That Limits the Collection of Personal Information

California Civil Code Section 1747.08 prohibits merchants from requesting and recording consumers' personal identification information (PII) in the course of completing credit card transactions. Earlier this year, California's Supreme Court held that zip codes are PII under Section 1747.08 and therefore cannot be collected during credit card transactions. (We summarized this ruling in our February 2011 Alert.)

In a one-page decision, a California state court held that Section 1747.08 does not apply to online transactions, and dismissed the class action complaint filed against Craigslist.

This decision provides much-needed clarity in this area as many online businesses collect personal information, such as name and address, when accepting payment by credit card.

This alert is a publication of Loeb & Loeb LLP and is intended to provide information on recent legal developments. This alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.

Circular 230 Disclosure: To ensure compliance with Treasury Department rules governing tax practice, we inform you that any advice contained herein (including any attachments) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer; and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.