7 On Your Side
Lawmakers want to limit stores' ID swipe return policy
SAN FRANCISCO (KGO) -- Last week we told you about a growing trend by retailers: swiping your driver's license. Now, two Bay Area lawmakers want to limit the capture of your personal data.
Many retailers are using new technology to capture your identification just to conduct normal business. The information is used to detect fraud, but some say it's treating everyone like a criminal and raises the risk of identity theft.
"That information getting into the wrong hands can wreak havoc," Rep. Jackie Speier, D-Calif., said.
Speier has growing concerns about the new retail trend of swiping shoppers' driver's licenses.
"They should not have access to all the information that's on that magnetic strip; I think that's very dangerous," Speier said.
"Everyone was wondering, and I was as well, what was happening to that information," Assm. Jerry Hill, D-San Mateo, said.
The trend also caught Hill's attention. He's wants to consider tightening state law to curtail license swiping.
Increasingly retailers are lifting data from the magnetic strip on your license. Some scan to verify your age when you buy alcohol. Now more are swiping when you return merchandise.
Mitzy Kato of Petaluma was one shopper who became concerned when she was asked to give a store her ID. She tried to return a $3 pack of LED lights to a Michael's store, but the store said she'd have to swipe her license or no return. For $3 it wasn't worth it. She kept the lights.
"The driver's license it has a lot of personal information," Kato said.
She had a receipt. But Michael's requires a swipe anyway. Same is true if you return items at Best Buy and at Victoria's Secret. Stores like Target and The Children's Place scan your license, but only for returns without a receipt. About one-third of merchants require an ID to return items, some of them swipe it.
"It's all an effort to control losses and reduce the unnecessary price increases for legitimate consumers," National Retail Federation spokesperson Joe LaRocca said.
LaRocca said stores lost $14 billion to fraudulent returns last year alone. Some examples: Consumers, who buy items, use them once and return them. Even worse? Career thieves use fake ID's and credit cards to buy merchandise and return it for cash.
Hill says it's unfair to swipe everyone when 99 percent of returns are legitimate.
California law does set limits on license scanning. But retailers may capture and store your data as long as they are using it to prevent fraud.
Hill says that loophole may be too big.
"When you're allowed to return items, that's not fraudulent, that's a normal course of business," Hill said.
ABC7 legal analyst Dean Johnson believes swiping everyone goes too far under the law. But the practice has never been challenged in court.
"This is a fairly new statute and the courts have not given us guidance on limitations yet," Johnson said.
"Unfortunately the law has a lot of exceptions in it," Speier said.
Speier says collecting data for everyday business puts consumers at risk.
"We are creating yet another avenue for the thieves to steal our identity; we have to tighten the law on the state level and tighten the law on the federal level Speier said.
shopping, jackie speier, 7 on your side, michael finney
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