FACTA Explained

FACTA (“Fair and Accurate Credit Transactions Act”) is a 2003
amendment to the Fair Credit
Reporting Act
(“FCRA”) drafted with the purpose of protecting
consumers from the growing trend of
identity theft
.  The Act primarily demands privacy of
disseminated information as well as limits how consumer information
can be shared. 

Since the enactment of FACTA, requirements were
adopted to better protect consumers from becoming a victim of identity
theft
.  Under the Act, consumers are entitled to receive
one free copy of their credit report annually from each of the
three major credit reporting agencies, Equifax, Experian and Trans
Union.  The amendment to the statute required each of the
credit reporting agencies to set up the website,
AnnualCreditReport.com, to provide free access to consumer
reports.  In its entirety, the Act contains seven titles, a
few of which are highlighted below. 

The first provision, Identity Theft Prevention and Credit
History Restoration, deals mainly with the prevention of identity
theft.  The first aspect of this section allows consumers the
opportunity to put a fraud alert on their credit
report
as well as an active duty alert for military who have
been deployed.  A fraud alert requires the credit reporting
agencies, at the consumer’s request, to put an alert on the
consumer report, that he or she has been the victim of identity
theft
.  The alert is to remain on the consumer’s file for
90 days and the credit reporting agency must notify all other
agencies of the alert.  Similarly, a military or active duty
alert remains on the consumer’s credit file for one year, during
deployment.  Consumers have the option to request an extended
alert which will remain on the credit file for seven years.
  
The second aspect of this title is the truncation of credit and
debit card numbers.  Under this section, businesses are
prohibited from printing more than five digits of a consumer’s
credit card number
or account number and expiration date on any
receipt provided at the time of sale.  This provision is
enforced with statutory damages ranging from $100 to $1000 per
violation.
 
The third aspect of this title focuses on identification of
possible identity theft, known as the Red Flags Rule.  This
rule required the Federal banking agencies and the Federal Trade
Commission
to regulate identity theft occurring within
financial institutions by regulating change of consumer address
procedures and identity theft education programs for
employees.   

The second title of the Act, Protection and Restoration of
Identity Theft Victim Credit History, focuses on how the credit
reporting agencies can help victims get back on track after the
devastating occurrence.  This title requires the FTC and the
Federal banking agencies to prepare a summary of the rights of
consumers with respect to the procedures for remedying the effects
of fraud and identity theft.  All reporting agencies are
required to provide a summary to any consumer that contacts the
agency stating he or she has been a victim of fraud or identity
theft.  Furthermore, this title requires the
credit reporting agencies
to block the reporting of consumer
information after receiving notice that the consumer has been a
victim of identity theft. 
 
If you believe you have been the victim of identity theft and need
the advice of assistance of counsel, contact
SmithMarco P.C.
for a free case review.