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Hello Everyone…

Driver's License and the LAW

     There is this cool little feature in the PSK software that lets you scan a customer's driver's license to extract and input their name, address, license number, etc. It's a great time saver for adding new customers to your database. However, it was brought to our attention recently that some states restrict this ability. Texas seems to be the most restrictive, but you may want to check with your local laws to determine if or how it impacts you. There is also a federal law that addresses this issue. Today, for those that are not aware of it, I want to show you briefly how to use the feature. In addition, I will explain the federal and Texas laws and what you need to do to stay legit.

     First the feature - When you want to add a new customer to the database (in StarterHut or in your Add Member screen from the POS), you simply put your cursor in the Driver License # field and swipe or scan the 3-D bar code. (3-D bar codes require a special kind of bar code scanner - if your state does not use mag stripes but does have the 3-D code, contact us for details on a reader).

   
    
     In the figure above, I swiped the driver's license into the Driver License # field. The result is that the following fields are populated in the screen:

1. First Name
2. Middle Initial
3. Last Name
4. Street
5. Zip Code
6. City
7. State
8. Driver License Number

As always Click OK to save.

Now for the laws:

     At the federal level, there is the Drivers Privacy Protection Act - 18 U.S.C. § 2721 et. seq. (Public Law 103-322)

     In short, here is what you need to know: This law was enacted to protect the privacy of individuals. This problem seems to have started with the devices that read your driver's license at bars to tell the doorman your age (god forbid the doorman do math). What was happening, without the holder knowing it, was that many bars and clubs started collecting all the data from the mag stripe. Soon, the clubs had the ability to market to all the red-haired, green-eyed, 20-something females for the half way to St. Patrick's Day party. In marches the ACLU.

     So while you can read the law in its entirety via the link above, here is what you are allowed to do (DISCLAIMER - I am not a lawyer, I only play one on a daily basis here. Contact your lawyers for validation of this interpretation in your jurisdiction):

(3) For use in the normal course of business by a legitimate business or its agents, employees, or contractors, but only -

(a) to verify the accuracy of personal information submitted by the individual to the business or its agents, employees, or
contractors; and

(b) if such information as so submitted is not correct or is no longer correct, to obtain the correct information, but only for
the purposes of preventing fraud by, pursuing legal remedies against, or recovering on a debt or security interest
against, the individual.

My interpretation - you can collect this data to validate the accuracy of and prevent fraud by the person's license you are scanning. You may NOT sell this information to a marketer. As for your own marketing, you should be using emails since it does not require a postage stamp and is clearly outside the scope of this topic.

If that is not good enough you can always get written permission under:
(13) For use by any requester, if the requester demonstrates it has obtained the written consent of the individual to whom the
information pertains.

As for Texas in particular, see Senate Bill 1445. Texas goes further by requiring written permission by the license holder:

(e) The prohibition provided by Subsection (b)(1) does not apply to a financial institution if the information is accessed and
used only for purposes of identification of an individual. The prohibition provided by Subsection (b)(2) does not apply
to a financial institution if each license or certificate holder whose information is included in the compilation or
database consents to the inclusion of the person's information in the compilation or database. Consent under this
subsection must be on a separate document, signed by the license or certificate holder, that explains in at least 14-point
bold type the information that will be included in the compilation or database. For the purposes of this subsection,
"financial institution" has the meaning assigned by 31 U.S.C. Section 5312(a)(2), as amended.

You will note this section (e) applies to Financial Institutions. You have to dig for the definitions in 31 U.S.C. Section 5312(a)(2) to find that Financial Institutions include:

(K) an issuer, redeemer or cashier of travelers' checks, checks, money orders or similar instruments;
(L) an operator of a credit card system;

So by cutting and pasting the following, you can keep a stack of these forms for new customers to sign prior to swiping the driver's license and you will be in compliance with the law (you will need to retain the signed copies somewhere):

By signing this document I explicitly give permission to (insert your company name here) to swipe my driver's license to add my name to the customer database which includes extracting the following fields:

1. First Name
2. Middle Initial
3. Last Name
4. Street
5. Zip Code
6. City
7. State
8. Driver's License Number

_______________ __________
Signature & Date

Until Next Time…

Enjoy J

If you need anything, let us know.

Also, if you would like something specific covered in one of these Lessons, send the request my way.

See all the great tips in our prior newsletters posted on our website under the Lessons from the Pro link. 

Thanks

Tom and Rick Robshaw

Email

Tom@clubprophetsystems.com

Rick@clubprophetsystems.com