(CN) - Chevron does not violate credit card laws when it asks gasoline customers for their ZIP codes, a California appeals court ruled.
Under the Song-Beverly Credit Card Act of 1971, sellers cannot condition facilitating credit-card transactions on forcing customers to provide personal information.
John Flores III and other plaintiffs filed a class action against Chevron USA and other oil companies, two weeks after the California Supreme Court ruled in February 2011 that ZIP codes constituted personal information under the act.
But the governor signed an amendment to the act that October, allowing gas companies to require the ZIP codes "solely for the prevention of fraud, theft or identity theft."
Chevron asserted that it reduced fraud by 80 percent when it began to require the ZIP codes. The company also does not use the information for marketing purposes.
A Los Angeles judge ruled in Chevron's favor, and the Los Angeles-based Second Appellate District affirmed last week.
"The undisputed facts show that Chevron requires ZIP codes only in pay-at-the-pump transactions at locations where there is a high risk of fraud, uses the information only to prevent fraud, and purges the information shortly after the credit card transactions are reconciled," Justice Frances Rothschild wrote for the court.
"We agree with the trial court that Chevron's conduct does not violate the Act, because the personal identification information is required for a special purpose incidental but related to the individual credit card transaction, namely the purpose of ensuring that the individual credit card transaction is not fraudulent," Rothschild added.
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