Identity theft is a real problem that many people, unfortunately, have to contend with. Millions of customers have their identity stolen each year. The problem is particularly prevalent in the United States. A fairly grim statistic claims that about 33% of adults in the U.S. have had their identity stolen, which is twice the global average.
The real problem, however, is the lingering effect of identity thefts. Consumer fraud leaves a long-lasting negative mark on the public record and credit score. Given the extent of this issue, it’s no surprise that there was a dire need for a law that specifically protects consumer information.
In 2003, former president George W. Bush signed the new federal law passed by the US Congress. And so, the FACTA law was born.
What Is FACTA Law?
FACTA, or Fair and Accurate Credit Transactions Act, aimed to enhance the privacy and accuracy of all consumer information. It was to be the new standard for the handling of said information, with the purpose of combating consumer fraud.
While the main focus of FACTA are provisions against identity theft, it also ensures consumers have a much better insight into their financial information. It’s in thanks to this law that consumers can request and obtain a free credit report once every 12 months. The three nationwide consumer reporting agencies (Equifax, Experian, and TransUnion) together with the Federal Trade Commission launched a website where you can check the credit report.
Another quite important provision of this law is allowing consumers to learn how their credit scores are calculated. It directs the Federal Trade Commission to develop a summary that notifies the consumers of their credit score. Moreover, the summary informs consumers that they have the right to get a copy of their credit score from a consumer reporting agency.
To top it all off, FACTA law made sure that the Federal Trade Commission made consumer rights notices widely available. In other words, you can learn about your consumer rights online, on FTC’s web page. That way, all consumers can inform themselves before identity theft ever happens.
How Does FACTA Protect Against Identity Theft?
There are multiple provisions of this law that grant protection against identity theft. They also provide you with additional options for handling consumer fraud.
Place Alerts on Credit Histories
Under FACTA, consumers can register a fraud alert on a credit card. You can contact one of the three nationwide credit bureaus and ask them to place a fraud alert. This service is free!
The agency you contacted will notify the other two who will then place the same alert. What a fraud alert does is make it far more difficult for the thief to open more accounts in your name.
Make sure to provide the agency with your latest contact information so that they can reach you in the future. As per protocol, they will inform you of all your rights and remind you that you can get a free credit report once per year.
Red Flag Rule
Certain provisions of FACTA law are not immediately obvious to an average consumer. The “Red Flag Rule” is just yet another portion of the law that aims to protect you from identity theft but in a more clandestine manner.
In essence, the “Red Flag Rule” requires creditors and financial institutions to enact special identity theft prevention programs. That means that institutions such as banks and credit unions have to proactively work on detecting and preventing identity theft.
Red flag rules are not all the same – they largely depend on the organization that implements the program. Depending on the nature of a financial institution, its size, and complexity, red flag rules can vary.
However, there are some common red flags that should arouse suspicion from the financial organization. These include address changes, unusual activity relating to a covered account, warnings from a consumer reporting agency, etc. In the case of a suspicious address change, for example, this law dictates that the issuer of a debit or a credit card must check the validity of such a change.
Reporting Fraudulent Information
The responsibility of reporting fraudulent information to the creditor falls to debt collectors. They’re the ones who need to inform a creditor when any suspicious or incorrect information arises.
While we’re on the topic of debt collectors, do remember that the FDCPA (Fair Debt Collection Practices Act) protects you against abusive debt collecting practices. A violation of the FDCPA may make you eligible to receive statutory damages of up to $1,000.
What Are the FACTA Law Regulations Regarding Credit Card Receipts?
This law does indeed regulate credit card receipts. The law states that any person accepting debit or credit cards for a business transaction should not, under any circumstance, print a receipt that reveals more than the last five digits of the card. Moreover, the law states that not a single digit of a card’s expiration date should be printed on the receipt.
This regulation applies to every machine-printed receipt (other forms of receipts such a hand-written are nearly obsolete). If a business prints any credit card information that is in violation of provisions of this law, you might be eligible to receive compensation.
There is no way around this regulation – merchants are absolutely required to shorten the credit card account number printed on receipts.
Do you have a FACTA violation to report? If you think your rights as a consumer have been infringed on or if you have more questions regarding FACTA law, you can let White, Jacobs and Associates know all about it. Our expert team of credit analysts will get you sorted out in no time.