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Kohl’s Settles Lawsuit for Illegally Collecting Shoppers’ ZIP Codes

Target isn’t the only major retailer hit with costly litigation recently. On Wednesday, a Massachusetts federal judge gave his stamp of approval to a class action lawsuit settlement against Kohl’s which alleged that the retailer illegally requested its customer’s ZIP codes for marketing purposes.

Jacqueline Brenner, the primary plaintiff on the class action suit, filed her complaint in April 2013 after a Kohl’s store clerk asked for her ZIP code while she was in the process of making a purchase. According to Brenner, Kohl’s then used that information as part of a targeted marketing campaign that included sending advertisements through the mail to her home.

The settlement between Kohl’s and Brenner was finalized in October. According to the details of the resolution, Kohl’s must create a $425,000 gift card fund that will be divided among all the plaintiffs who are officially part of the lawsuit. The judge also approved of an additional $135,000 to cover the plaintiffs’ collective attorney fees and $3,000 specifically for Brenner.

Greg Blankinship of Meiselman, Packman, Nealon, Scialabba and Baker PC., the lead attorney for the plaintiffs, said, “We’re pleased that Judge Stearns approved the settlement, which benefits Massachusetts consumers and reinforces the importance of consumers’ privacy rights.” This is not the first time Kohl’s has been successfully sued for illegally collecting ZIP codes. In January 2013, a California federal judge approved a similar settlement against Kohl’s for $650,000.

In March 2013, the Supreme Judicial Court of Massachusetts ruled that ZIP codes count as personal identification information since businesses can use them to discover other protected pieces of data, like phone numbers and addresses. As a result, in the state of Massachusetts, it is illegal for a retailer to collect ZIP codes as part of a credit card transaction. The California Supreme Court rendered a similar decision in February 2011, the first of its kind.