Requiring ID for credit card transactions illegal?
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  1. #1
    Join Date
    Apr 2011

    Requiring ID for credit card transactions illegal?

    I've been discussing with a co-worker about a customer that came in and when we asked for photo ID for her credit card, she said it was illegal for us to ask for ID and we could be sued.

    Our policy is that we require photo ID for all credit card purchases, while seldom it's a problem, I can't imagine there being a law that says that if we ask or require ID for credit card purchases (regardless whether or not they signed the back), it's an offense that could result in a lawsuit. Our business does receive customers (often nannies, kids) that get a hold of their parent's credit cards to make relatively large purchases, hence one reason why we require it.

    So is it really illegal and by what law?


  2. #2
    Join Date
    Aug 2008
    Northeastern United States

    Re: Requiring ID for credit card transactions illegal?

    It's not illegal. At worst, it's a civil matter between you and your card processor. The customer would have no claim. Here are the Mastercard rules:

    If a customer presents a valid, signed card, you must accept it. You are prohibited (as per your store's agreement with the card processor and Mastercard) from requiring further ID as a condition of purchase. It's not wrong to ASK for the ID, but it's against your merchant agreement to require it.

    HOWEVER, if the card is not signed, then as per the Merchant Acceptance Guide, it is not a valid card. A customer presenting an unsigned card must present additional ID and sign the card before the merchant is allowed to complete the transaction. If the customer refuses to sign the card, the merchant must refuse the transaction. The Guide goes on to clarify that a card with "Ask for ID" (and no signature) written in the signature space is not a valid card and must not be accepted.

    It's unlikely that you'll be sued. A more likely result is a warning letter from your card processor and/or termination of your ability to accept the given card.

    Visa's rules are virtually identical in this area, and AmEx requires merchants to treat AmEx users exactly the same as any other cardholder. In other words, the spirit of these rules apply to every major credit card.
    I am not a lawyer, nor am I an "expert" or "authority" on anything. This post reflects my opinion only, and may be wrong or inappropriate. Always consult a legal professional for guidance.


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