Legal Question in Technology Law in New York
Online Credit Card Requests
A b2b company does business with a large portal provider and draws all the shoppers from the protal while its clients list items for sale using the companies database to store information. Prior to the sale the companys clients would like to collect credit cards details from the shoppers to verify they can purchase items from their online store. Then once the credit card of the shopper is verified and the item is purchased the the clients would complete the transaction by charging the credit card.
Can the b2b company legally keep that Credit Card in there database and then pass them to their clients?
1 Answer from Attorneys
Re: Online Credit Card Requests
It's not clear from your question how the credit card information is shared between the companies and whether it's consensual or not.
In general, the issues of credit card information are governed by contract (if the two companies in question have an agreement on co-marketing, linking, etc.) between the portal and the B-to-B company and by the Terms of Use and Privacy Policies as they apply to individual users of the respective websites. This area of law (privacy, encryption and safety of consumer financial data) is largely left to industry self-regulation (unless you are dealing with financial services, health care and certain other heavily regulated industries), however, if one of the firms in question is engaging in fraud, misappropriation of information or unfair competition, naturally, its conduct would be actionable (and, possibly, criminal in nature).
This is not legal advice. If you require legal consultation, feel free to contact me by email or phone.
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