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Subway’s footlong credit card settlement

Jay MacDonald

You know how your favorite burger joint inevitably asks, “You want fries with that?”

Given its latest string of consumer blunders, perhaps Subway should consider a similar tack, but instead inquire, “You want a class-action settlement with that?”

In March, the footlong giant agreed to pay $30.9 million to 2.6 million unhappy customers, which, if approved, will set a new record for class-action settlements under the Fair and Accurate Credit Transactions Act.

Passed in 2003, FACTA is a law better known for giving you the right to obtain a free copy of your credit reports once a year, but it also protects consumers from having their card information made available after a credit or debit card purchase. Prior to FACTA, merchants could print out full card numbers as well as full expiration dates on point-of-sale receipts.

Subway’s transgression? Printing full credit card expiration dates on customer receipts in violation of FACTA regulations and the Credit and Debit Card Clarification Act of 2007, potentially compromising the security of the cards involved. And it apparently wasn’t the first time; plaintiff Shane Flaum claims Subway had been sued for similar FACTA violations twice in 2007, then again in 2008 and 2009.

Assuming the settlement comes in at roughly $20 million after legal fees, each of the 2.6 million Subway customers who received such receipts since Jan. 1, 2016, could rake in a juicy $7.69, or enough to score a celebratory 6-inch Italian BMT with a bag of chips.

It’s been a rough year or so for the Connecticut-based fast food chain. In February 2016, Subway agreed to cough up $520,000 in legal fees and $500 apiece to 10 plaintiffs to settle a 2013 class-action suit that claimed its famous footlongs didn’t quite measure up. What about compensation for the multitude who were presumably shorted? “It was difficult to prove monetary damages, because everybody ate the evidence,” co-lead attorney Thomas Zimmerman told The Associated Press.

The foot-short donnybrook coincided with the roiling public scandal involving former Subway spokesman Jared Fogle, who pleaded guilty to having sex with minors and trafficking in child pornography. He was sentenced in November 2015 to 15 years in prison.

Despite handing over a cool $30.9 million to put the credit card receipt snafu behind them, Subway’s tsunami of litigation won’t be ending anytime soon.

In October 2016, Fogle’s ex-wife, Kate McLaughlin, sued the sandwich maker for choosing profits over the well-being of her and her children by not reporting Fogle’s pedophilia to authorities as early as 2004. And just three weeks ago, a Connecticut man launched a new class-action lawsuit against the chain, claiming the chicken it uses in its Oven Roasted Chicken sandwich and Sweet Onion Chicken Teriyaki chicken strips is only half real chicken. The rest is, allegedly, “commercial preservatives and fillers.”

Keeping an eye on those receipts
Want to avoid having your card data compromised by a credit or debit card receipt? Here’s what to look for before you casually toss that lunch receipt:

  • Under FACTA, all card numbers must be “truncated” (shortened) on receipts to include no more than the last five numbers of a debit or credit card. No part of a card’s expiration date should appear on a receipt, although merchants may substitute asterisks, dashes or blank spaces in its place.
  • Should you receive a card receipt with any of the banned information on it, you may be able to file or join a class action lawsuit over the FACTA violation. The appropriate civil attorney will be happy to review your case at no charge and take legal action if warranted, according to Top Class Actions, a website specializing in information on class-action suits.
  • FACTA fines are steep for merchant violators, with penalties running between $100 and $1,000 per transaction. After all, those compensatory Subways aren’t going to buy themselves.

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