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Show Us Your Cards: No Privacy Interest in Credit Card’s Magnetic Stripe

by Douglas Brent, Attorney at Stoll Keenon Ogden PLLC
Benjamin Jakubowicz, Summer Associate at Stoll Keenon Ogden PLLC

In United States v. Bah, the Sixth Circuit Court of Appeals recently ruled that a warrantless scan of the magnetic stripe on a debit, credit or gift card is not a “search” under the 4th Amendment. This marks the first time that a federal appeals court has ruled directly on what privacy interests, if any, lie in information recorded on the magnetic stripe on the back of such a card.

Unusual Discovery in the Trunk of a Rental Car

A routine traffic stop resulted in two men being taken into police custody. Bah, the driver, was arrested for driving with a suspended license. His passenger, Harvey, also was detained. Consistent with Tennessee law, police officers performed an inventory search on the rented vehicle, discovering some 68 credit, debit and prepaid gift cards in the glove box and trunk. Additional cards were found on the suspects and in the back seat of the police cruiser that hauled them. In all, the officers found 86 credit, debit and prepaid gift cards.

At the police station prior to obtaining a search warrant, an officer scanned several cards with a magnetic reader to decode the data in the stripes.  The scan revealed the encoded information on the magnetic stripes did not match information printed on the cards. Upon further investigation, the police determined that the magnetic stripes had been re-encoded with compromised account numbers, and several of the compromised accounts had already incurred fraudulent charges.

After being indicted, the two men moved to suppress the evidence obtained from the scans. They argued that scanning the magnetic stripes without first obtaining a warrant was an unlawful search. The lower court denied the motion, ruling that the scan did not constitute a search because a cardholder has no reasonable expectation of privacy in the data found in the magnetic stripe. Bah and Harvey appealed.

The Sixth Circuit’s Decision

The Sixth Circuit Court of Appeals made short work of the appeal, finding that the warrantless scans of the magnetic stripes did not offend the 4th Amendment because the scans did not constitute an unreasonable “search” as protected by the 4th Amendment.

The Court ruled the scans were not a “search” at all because:

  • the scans did not involve a physical trespass into a constitutionally-protected area, and

  • the scans did not violate the cardholders’ reasonable expectations of privacy.

The Court noted that sliding a card through a data reader does not require a physical penetration of constitutionally protected space. As long as police come into possession of the cards through lawful means (such as an inventory search), scanning the cards did not constitute a search.

No Reasonable Expectation of Privacy

Regarding the issue of reasonable expectation of privacy, the Court explained that every court to consider the issue has ruled there is no reasonable expectation of privacy in an account number—and consequently the magnetic stripe—that is routinely and voluntarily shared each time the card is used. The Court reiterated that when police come into lawful possession of a card, the cardholder has “no separate privacy interest in the magnetic stripe beyond that in the card itself.” 

In support of its findings, the Court differentiated between the magnetic stripes on theback of credit, debit and prepaid gift cards and data stored on smartphones, computers and other media devices where warrantless searches are generally prohibited because of differences in storage capacity. The Court noted that the storage capacity of the magnetic stripe pales in comparison to those devices and discovering the contents of the stripe would not allow an officer to reconstruct a person’s private life. 

The Court reiterated that data stored on the magnetic stripe—unlike that in a smartphone—is intended to be read by 3rd parties, concluding that most of the data found in the magnetic stripe can be gleaned by simply looking at the card , as opposed to a hard drive or other storage device where the contents are truly unknown. The Court distinguished the Supreme Court’s landmark decision in 2014, Riley v. California, establishing a bright line rule that examination of the contents of an arrestee’s wireless phone always requires a warrant. Congruently, the Court noted an initial examination of Bah’s Blackberry had been unlawful under the reasoning of Riley.

While the Court’s ruling in Bah is binding upon only the Sixth Circuit (Kentucky, Tennessee, Michigan and Ohio), this legal issue will likely recur in other circuits, as the plague of credit card breaches continues to challenge the resources of law enforcement,and as police officers routinely uncover caches of plastic payment cards. 

Bah may ultimately provide the correct analysis for other federal courts.