Michaels Stores Settles ZIP Code Collection Suit

By Lance Duroni (February 12, 2014, 8:44 PM EST) -- A Massachusetts federal judge on Wednesday granted preliminary approval to an $875,000 settlement resolving a class action that accused arts-and-crafts retailer Michaels Stores Inc. of improperly demanding ZIP Codes from its customers during transactions.

U.S. District Judge William G. Young gave his initial blessing to the deal and set a final fairness hearing for May 20, according to an order filed with the court.

The settlement resolves allegations brought by two Massachusetts residents that Irving, Texas-based Michaels asked for its customers' ZIP codes not for credit card verification, but to allow the retailer to "reverse engineer" the customers' addresses.

"The complaints...

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