Privacy & Information Security Law Blog

On July 21, 2017, New Jersey Governor Chris Christie signed a bill that places new restrictions on the collection and use of personal information by retail establishments for certain purposes. The statute, which is called the Personal Information and Privacy Protection Act, permits retail establishments in New Jersey to scan a person’s driver’s license or other state-issued identification card only for the following eight purposes:

• to verify the authenticity of the identification card or to verify the identity of the person if the person pays for goods or services with a method other than cash, returns an item or requests a refund or an exchange;
• to verify the person’s age when providing age-restricted goods or services to the person;
• to prevent fraud or other criminal activity if the person returns an item or requests a refund or an exchange and the business uses a fraud prevention service company or system;
• to prevent fraud or other criminal activity related to a credit transaction to open or manage a credit account;
• to establish or maintain a contractual relationship;
• to record, retain or transmit information as required by state or federal law;
• to transmit information to a consumer reporting agency, financial institution or debt collector to be used as permitted by the Fair Credit Reporting Act or certain other relevant federal laws; or
• to record, retain or transmit information by a covered entity pursuant to the Health Insurance Portability and Accountability Act of 1996.

In addition, the law limits the information which retail establishments may collect from the scanned identification cards. The information that may be collected from the card includes the person’s name, address, date of birth, the state issuing the identification card and the identification card number. The law also places restrictions on the retention, sale and sharing of such information and establishes security requirements for any information retained from the scanned identification cards. The law emphasizes that retailers must report security breaches of certain information collected from scanned identification cards pursuant to New Jersey’s security breach notification statute.

The law is set to take effect three months from the date of enactment.