Can company pull my credit report when I reload a gift card?

April 22, 2014 18:00 by Consumer Ed

Dear Consumer Ed:

I attempted to reload a restaurant gift card. After providing my credit card number, expiration date and 3-digit code, I was then prompted with three questions: The street number of my residence on a street that I lived on several years ago, the type of residence I live in on my street, which was given by name, and what street I have lived on in the past out of 4 choices.  The processor must have accessed my credit report.  Is this legal?

Consumer Ed says: 

Yes, this is likely legal under the Fair Credit Reporting Act, as well as the terms and conditions of the gift card that you used.

The Fair Credit Reporting Act (FCRA) limits the manner (and the reasons) in which a consumer’s credit report may be accessed. The Act is designed to protect the privacy of consumers’ information, and to guarantee that the information supplied by credit reporting agencies is as accurate as possible. Under the FCRA, there must be a permissible and legitimate purpose for a business to check your credit report.  For example, a business may access your report if you are applying for credit and it needs to check your creditworthiness, or if you already hold an account with a business and it needs to determine if you continue to meet the terms of the account.

A business can also access your report if it has a legitimate need for the information in relation to a business transaction that you initiate.  In your case, by using and then reloading the restaurant gift card, you can be said to have initiated a transaction with this business.  The business may have obtained this information about you in order to verify your identity before completing the transaction.  As long as the information is not misused or mishandled, identity verification of a consumer helps to stop fraud and identity theft, and may be deemed to be for a legitimate purpose.

Additionally, the terms and conditions of the gift card you purchased may give the business the right to check your information.  Often in those terms and conditions, a business will expressly retain the right to access information about you for identity verification and for fraud prevention.  If your gift card is subject to such a provision, then when you began to use the gift card you may have given the business permission to check your personal information, and to verify your identity. 

If you still have questions about how or why the business accessed your information, you could try the following:

  • Check the terms and conditions of the gift card you purchased to see whether you have authorized the business to check your information; or
  • Ask the company directly how they obtained your information and what steps they take to ensure your private information is protected.

If you aren’t satisfied with the business’ response to your questions, or feel they are misusing your personal information, then you can always simply take your business elsewhere.

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Can a merchant require my address when I'm making an in-store purchase or exchange?

January 21, 2014 17:56 by Consumer Ed

Dear Consumer Ed: 

I am tired of being asked for personal information when I am simply trying to buy something. What does Georgia Law say concerning merchants "requiring" an address when you are making a purchase or trying to return or exchange merchandise?  I am asking this with regards to actually being at a place of business and NOT shopping online.  Today I tried to exchange an article of clothing and was told by the sales person that I had to provide my address in order to conduct the exchange.  Is this legal?

Consumer Ed says: 

Georgia law generally doesn’t prohibit merchants from asking that consumers provide personal information in order to complete a transaction, with some very limited exceptions.  When a customer pays for a purchase by personal check, the Georgia Fair Business Practices Act specifies the information a business may collect for identification purposes. It states that a merchant may not imprint or copy the customer’s credit or debit card number as a condition of purchase by check. However, the merchant may still:

  • Request a driver’s license number.
  • Ask to see a credit or debit card as a form of identification.
  • Record on the check the type of credit card and expiration date.
  • Record a credit card number and expiration date, if the credit card company has agreed to guarantee checks as a special service to its cardholders.
  • Record an address and telephone number.

Ultimately, a merchant may require that you provide your address in order to make a purchase or to process a return or exchange of goods at their business.  Businesses often ask customers for their personal information for a variety of reasons, including:  to keep track of the customer’s purchases under the merchant’s loyalty rewards program; to build customer purchasing profiles to help them better market their products and services to you; or to create “return profiles” that catalog and analyze returns in their store to detect fraud and organized retail crime. 

Merchants are free to request information as a requirement of transacting business with them, but ultimately the decision to do business with a particular merchant  is up you, the customer.  So the decision whether to share your personal information with a merchant or to withhold your personal information is in your hands.  A business may decide not to provide you with a service or benefit if you don’t provide your information.  However, you should discuss any concerns you have with the merchant – they may be willing to waive the requirement that you give them your personal information or that may be able to allay your concerns by explaining how they use your personal information and how they ensure your information is kept private.

A few tips

  • Ask questions. If a merchant asks for personal information that you feel uncomfortable disclosing, don’t be afraid to ask questions, such as:
  • Why do you need it?
  • What will you do with it?
  • What authority do you have to require that I provide it?
  • What are the consequences if I don’t provide it?
  • How will you protect my personal information?
  • How will you dispose of my personal information once you’re finished using it?
  • Look for disclosure notices.  Often merchants will have a notice at the cash register or on your sales receipt indicating the merchant’s terms of purchase and terms for returning merchandise, including what information you may be asked to give them in order to complete a transaction or make a return.  Review these notices carefully before you make a purchase so that you are not caught unaware later.
  • Don’t be afraid to say no. If you do not feel secure sharing your personal information with a particular merchant, or have concerns that your information will not be kept confidential, don’t risk it.  Take your business elsewhere.


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Automatic billing following free trial

November 18, 2013 17:24 by Consumer Ed

Dear Consumer Ed: 

I signed up for a free trial of an online sports subscription, and a month later I was billed for it and had to call to cancel. The same thing happened to me with a credit monitoring service.  Fortunately, I caught it on my bank statement right away, but what if I hadn’t? Are businesses allowed to automatically bill you every month after the free trial period is up?

Consumer Ed says: 

The two situations you have described are examples of so-called “negative option” plans.  In a negative option plan, goods or services are provided to the buyer automatically unless, like you did, the buyer tells the seller that they don’t want them.  More specifically, your examples are of negative option plans in the form of a free trial offer, which are very common. 

The legality of this practice depends on the terms and conditions of the particular plan, and on how the seller discloses these terms and conditions to the buyer.  Under the Federal Trade Commission’s Negative Option Rule, which the State of Georgia has adopted, the seller must disclose the following terms to you in a clear and conspicuous manner:

•    The fact that the offer is a negative option plan
•    Minimum purchase requirements, if any
•    Cancellation Rights
•    Refusal Rights
•    Postage charges, if any
If a business doesn’t comply with the Negative Option Rule, the consumer isn’t obligated to pay for the products or services associated with the contract. 

If you were enrolled in a negative option plan without your knowledge, and the terms and conditions of the plan were not described in a clear and conspicuous manner, you may file a complaint with the Federal Trade Commission by visiting or calling 1-877-FTC-HELP (1-877-382-4357); or the Governor’s Office of Consumer Protection by visiting our website at or calling 404-651-8600.

Consumers who believe that they weren’t appropriately notified of the negative option billing should also consider consulting a private attorney to discuss their situation.

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