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L.A. Tan Settles First Fingerprint Scan Class Action for $1.5M

A court in Chicago issued its approval this month for a $1.5 million settlement in the first of two class action lawsuits filed against L.A. Tan Enterprises, Inc. and some of its local franchisees claiming they mishandled customers' biometric information, mainly collected from fingerprint scans. Out of that settlement, $600,000 will go to the attorneys who filed the class actions.

In the case, Sekura v. L.A. Tan, filed in Cook County Circuit Court on November 2015, Edelson P.C. attorneys claimed L.A. Tan used fingerprint scanning technology rather than a key fob to identify its customers in a membership database. They assert that the nationwide tanning franchisor failed to obtain written consent from members prior to collecting the biometric data, and failed to inform them how the information would be stored, and then destroyed when memberships were terminated or the salons closed.

Edelson attorneys said in a Bloomberg Law article, that this is the first settlement reached under Illinois' Biometric Information Privacy Act, which requires companies to gain consent before collecting a person's biometric data.

The settlement terms require L.A. Tan to pay $125 to each class member who filed a claim, and to put processes in place to comply with the Illinois statute or destroy all biometric data it has obtained. Attorney Ben Richman made it clear that the lawsuit did not accuse L.A. Tan of doing anything nefarious or losing or selling its customers' biometric fingerprint date, the Bloomberg report stated. "Rather, the company did not treat the data as carefully as the law requires," the lawsuit states.

Richman also stressed that this type of data is "incredibly sensitive." He said, "You can get a new social security card if it's stolen, but you can't go get a new fingerprint or a new face. This information was incredibly sensitive and it should be treated as such."

The Bloomberg report said the consequences of losing biometric data are not yet totally clear. It told, "In 2015, hackers breached the federal government's Office of Personnel Management and stole the fingerprints of 5.6 million government employees." A cyber security expert wrote, "5.6 million U.S. government employees need to remember that someone, somewhere, has their fingerprints. And we really don't know the future value of this data." He said if, in 20 years, we routinely use our fingerprints at ATM machines, that fingerprint database will become very profitable to criminals. And, he said, if fingerprints start being used on our computers to authorize our access to files and data, that database will become very profitable to spies."

Another report by the Cook County Record stated that while the scanning and storage of fingerprint data is permissible, Sekura's lawsuit argued L.A. Tan broke the Illinois BIPA law by sharing the scans with an out-of-state, third-party software vendor, identified as SunLync.

The second lawsuit was filed shortly after the Sekura case, and was filed against L.A. Tan and franchisee Krishna Schaumburg Tan. The allegations are similar in that it accuses the franchise owner of failing provide BIPA-compliant written notification to customers about the data collection, as well as a retention schedule and guidelines for permanent destruction of fingerprint data should the business fail.

Cook County Record said, "With more than 65 percent of L.A. Tan salons in foreclosure, a figure the lawsuit attributed to a 2013 WilliamBruce.org report, Sekura and Edelson argued the future of the biometric information collected by L.A. Tan and its franchisees is also in peril, a concern which they said also prompted the lawsuit."

L.A. Tan was represented in the class action suit by Baker Hostetler in Chicago.

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About Janet Sparks

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Janet Sparks is the former publisher of the Continental Franchise Review, an industry newsletter that covered the franchise community for over 30 years. She has also been a columnist for a leading franchise magazine for the past 13 years. Today she is an independent journalist who engages in investigative reporting, tackling complex issues that impact the franchise industry.

Janet can be reached at jsparks@bluemaumau.org or at 303-799-7398.