Commissioner’s Refusal to Conduct Inquiry an Important Reminder to Consumers

September 19, 2007

Alberta’s Information and Privacy Commissioner has declined to conduct an inquiry following a complaint from an individual who was asked by two Calgary retailers to verify his identity for credit card purchases. Commissioner Frank Work refused to call an inquiry because he believes the practice of verifying identification to be a reasonable practice.

The individual made purchases at two retail outlets by credit card. He was asked to produce identification to confirm that he was indeed the cardholder. The individual objected to the blanket security policy, even though reasons behind the practice were explained to him.

The individual complained about the practice to the Alberta Commissioner’s office. The Commissioner’s office investigated the complaint and found it to be unsubstantiated. When the individual requested that the Commissioner conduct a formal inquiry into the matter, the Commissioner declined.

The Commissioner acknowledged that organizations have a duty to safeguard personal information under the Personal Information Protection Act (PIPA) and must therefore prevent the unauthorized use of personal information. Work believes that credit card fraud is a serious and pervasive problem that has demonstrated the necessity of taking reasonable measures to prevent fraud.

British Columbia has similar private sector legislation and both the Alberta and B.C. offices feel consumers need to be reminded that verifying ID is important to protect them.

The Alberta and BC and Federal offices issue the following reminders to consumers:

  • Consumers have a choice of paying by cash, debit card or credit card.
  • Retailers may have to seek authentication of the credit card user.
  • It is reasonable for retailers to examine identification, such as drivers’ licenses provided no information from the ID is actually recorded.
  • These measures are in place to protect you as the consumer from possible credit card fraud.
  • Signatures on credit cards are not always a reliable security measure because they can be forged.
  • There are no photos on credit cards, which makes it difficult to verify that the customer is indeed the cardholder.

Commissioners Work, Loukidelis and Stoddart believe that a simple identification verification policy may be good business for retailers and provides a level of protection for the consumer.

The Commissioners say that, because credit card fraud has become a major issue, these measures are designed to protect the consumer from fraud and to protect retailers from liability in the event the card being used is fraudulent.

Both Commissioners also agree that asking for identification is a reasonable security measure, as long as the information from the ID is not being recorded by the retailer. The Commissioners estimate that once new PIN-activated credit cards are introduced, the practice of verifying the identity of the purchaser may no longer be necessary.