A couple of years ago I read a small article in my local paper about
credit card purchases.  The article said it was illegal for a merchant
to ask for a driver's license when you are making a credit card
purchase, because a credit card is ID, and all they are supposed to do
is check the signature.  The article went on to say the reason they
were publishing this information is because merchant's often asked
only minorities for supplemental ID to their credit card, and if
someone asked you for additional ID when making a credit card
purchase, you should refuse.  I'm trying to confirm if this is the
truth or not (as I said, it was a small local paper that sometimes
published as the truth things I now know are urban legands) and I
can't find anything that confirms or denys this.  What is the law in
this matter?  Can a merchant require a driver's license when using a
credit card, or is the signature on the back of the card all the ID
they need?  (I live in the US)

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Request for Question Clarification by pinkfreud-ga on 02 Oct 2002 15:09 PDT

The laws on this matter vary from state to state. In which state do you live?

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Clarification of Question by baerana-ga on 02 Oct 2002 15:34 PDT

Pennsylvania.  I have also lived in New York and New Jersey, and would
like info for those states if possible, but Pennsylvania is the
important one.  Thanks!

Hi,

That's an interesting question.  The basic answer is that there's
nothing illegal in a criminal sense about a store owner asking for
additional identification, provided, of course, that the merchant does
so in a nondiscriminatory fashion.

But -- and this is a big but -- asking for ID can violate the contract
that merchants have with the companies that process credit card
information and that authorize transactions.  These contracts provide
that the merchant follow certain procedures in accepting credit cards
-- and these procedures either implicitly or explicitly prohibit
asking for additional ID beyond a signature. So if merchants are
asking for ID in addition to a valid signature, they won't get in
trouble with the police or the district attorney, but they can get in
trouble with Visa or MasterCard or one of the card company's
intermediaries.

Among those who say you shouldn't provide additional ID if asked is
the Indiana Department of Financial Institutions, Division of Consumer
Credit.  I believe you'll find the department's consumer guide
informative:

Credit-Card Signature: Usually all the ID Needed
"When you pay for merchandise with a Visa card, MasterCard, or
American Express any store that accepts these cards should accept
yours too, no questions asked. It's part of the deal that merchants
agree to when they become participating members.  They must check your
signature and the card - electronically or by telephone - to be sure
it's valid. Once the answer comes up yes, they can to ahead and
charge.  They can't ask you for any further identification - not a
license plate number, Social Security number, proof of address, phone
number, or picture ID."
HTML format: http://www.dfi.state.in.us/uccc/credit_card_ID.htm
PDF format: http://www.dfi.state.in.us/conscredit/PDFs/id.pdf

I examined a several merchant agreements to verify this.  The one by
Primax Payment Systems (link below) appears to be typical.  It doesn't
explicitly prevent a store operator from asking for identification,
but it does require merchants using its services to follow the
prescribed procedures.  The procedures state that the store should
compare signatures and the photo (if there's one on the card) with the
person, then swipe the card to get approval.  If a merchant asks for
ID, he or she isn't following the procedures.  If there's any question
after comparing signatures and the photo, then the store is required
to retain the card and call a special phone number for authorization.

Primax Payment Systems Merchant Agreement
http://www.primaxpayments.com/AgentBanks/TK%20KEITH%20Merch%20Agrmt%200901%20.pdf

Another agreement I found explicitly prohibits asking for ID:

Cardservice International Merchant Agreement
"Before accepting any Card, Merchant shall:
"...(c) not request or record such personal Cardholder information,
such as home or business telephone number, a home or business address,
driver’s license, or other such identification onto the sales draft as
a condition of the sale unless such information is required under
specific circumstances cited in MasterCard or VISA rules and
regulations"
https://www.i-axis.com/secureapps/1stcommerce/merchagrmt.asp

The only circumstances under which these agreements allow a merchant
to ask for ID is when the card does not have a signature on it. 
(Sometimes people write "Ask for ID" in the signature space as a way
of preventing fraud.) In those cases, the merchant is required either
to check ID or to obtain special authorization to accept the card.

So the newspaper didn't have its facts completely right.  Asking for
ID is "illegal" only in the sense that it's a breach of contract that
enforceable in court, but not in the sense that it's prohibited by
law.

I hope this satisfies your curiosity.

Sincerely,

mvguy




Google search term: "ask for identification" "credit card"
://www.google.com/search?q=%22ask+for+identification%22+%22credit+card%22

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Clarification of Answer by mvguy-ga on 03 Oct 2002 12:03 PDT

Hi,

The first comment below prompted me to look into this some more. The
information I gave you is correct; there appear to be no laws that
prohibit merchants from asking for ID, although the matter is mostly
moot because the credit-card companies don't allow it anyway.  But
there are some states, and Pennsylvania is among them, that do
prohibit the merchants from RECORDING personal information such as
license and phone numbers in connection with credit card transactions.
 In other words, they legally can ask for the IDs, but they can't
write down the information they get that way.

Here are some more pages, then, that you may find useful:

Merchant Credit Card Abuses
"Merchants may ask you to provide a phone number, home address, or
other personal information on credit card sales slips. This practice
not only violates your privacy, but American Express, MasterCard, and
Visa prohibit requiring it as a condition of sale."
http://www.gofso.com/Premium/LE/06_le_ic/fg/fg-merchants.html

States That Prohibit Recording of Personal Information
http://www.gofso.com/Premium/LE/06_le_ic/fg/fg-merchants.html#MORE:A

Using Credit and Charge Cards
"Several states, including California, Delaware, Georgia, Kansas,
Massachusetts, Minnesota, Nevada, New Jersey, New York, Oregon,
Pennsylvania, Rhode Island and Wisconsin, bar merchants from recording
personal information when you use a credit card. Furthermore,
merchants agreements with Visa and MasterCard prohibit them from
requiring a customer to furnish a phone number when paying with Visa
or MasterCard. Nevertheless, many still ask."
http://www.courttv.com/legalcafe/work/credit_cards/credit_background.html

Best wishes,

mvguy

Very helpful and informative.  Thanks!

California has a law that forbids a merchant from recording the
information obtained from your driver's license, although the merchant
is still permitted to ask to see such identification:

http://www.privacyrights.org/fs/fs15-mt.htm

http://www.bbbsilicon.org/topic121.html

This is a corporation/business problem not a legal problem;

 meaning-

No company has the right to ask for any information what so ever as
they are simply a business this goes for Credit Card companies them
selves Banks(provided they are not government endorsed),shops any non
government source you can think off.
You simply do not give them business if they require personal
information that you distaste as it is their loss not yours

Need a Credit Card ? another cooperation insured by an insurance
corporation of which the government is a customer of the same
insurance corporation and a customer of the credit card company
therefore the government just loves business therefore the government
is just a big business that has developed a power through business to
tell you what to do or fine you.
when companies have government customers you instantly have trouble as
the government becomes incorporated therefore some business's think
they have the power to seek personal information due to the power of
their incorporation in bussiness as a whole.Not always true but
influence on a whole produces the later inclusion.