The Fair and Accurate Transactions Act
The Fact Act meaning the Fair and Accurate Credit Transactions Act put into law on Nov. 22 2003 by congress and signed by George Bush on December 4, 2003.
At least one good thing George W. did for us.
This was added as an amendment to the Fair Credit Reporting Act.
It's primary agenda is to help consumers fight identity theft and one of the tools in that fight is our right to access at least one credit report from each of the major three credit bureaus at no cost every 12 months.
Though it is suggested strongly to check your report more often than that especially if you are very active with credit lines.
There are several areas the Fact Act touches on but this will only be a brief discussion on what is important to credit repair.
As previously mentioned, identification theft and the restoration of credit history is the number one reason for this Act.
New regulations on Fraud Alerts and Active Duty Alerts were created.
- Along with the right to block reported information by credit reporting agencies and those that furnish that info to the agencies any information resulting from identity theft.
- Limitations on printing of customer credit card numbers on receipts.
This is why we only see the last four numbers on receipts and account statements.
- Regulations for financial institutions in the detection of identity theft.
- Improvement in use of and consumer access to credit information.
This area has to do with the free credit report and the 5th FACTA reason code.
- It requires secure disposal of consumer information.
- Limits the use and sharing of medical information
in the financial system.
Fact Act and fraud alerts
In the prevention of Identity Theft the Fact Act allows consumers who believes they ARE or ABOUT to be a victim of fraud to place alerts on their accounts.
The bureau they contact must then alert the other agencies to the situation. The alert lasts 90 days.
At the end of that time the consumer can request an extension.
To implement a fraud alert extension, a copy of an identity theft report that has been filed with a law enforcement agency will be needed.
The reporting agency is required to make known the consumers rights when they are a victim of identity theft and disclose it in writing.
Notice of identity theft victims rights
This disclosure should also state that you may have more rights
under your states laws.
The alert when extended is then disclosed in the credit score and on record for up to 7 years.
This extension then requires the agency to exclude the consumer from any lists to third parties with the intent to extend offers of creditor insurance for up to 2 years.
It also allows the consumer to receive 2 free credit reports in a 12 month period.
The Active duty alert was created to help military personnel deployed overseas from becoming a victim of fraud.
It requires any agency to disclose that alert with any credit report issued up to 12 months from activation.
It also excludes those members from third party offers of credit or insurance for up to 2 years.
The Fact Act gives these other rights to the victims of identity
You have the right to obtain documents relating to fraudulent transactions made or accounts opened using your personal information.
You have the right to obtain information from a debt collector in the event of Identity theft.
If you believe information in your file results from identity theft, you have the right to ask that a consumer reporting agency block that information from your file.
You also may prevent businesses from reporting information about you to consumer reporting agencies if you believe the information is a result of identity theft.
Truncation of credit and debit card numbers
This is the act of shortening the numbers printed on a receipt.
The red flag rules for financial institutions are a result of the Fact Act.
The Fact Act prohibits businesses from printing more than 5 numbers on receipts.
They are also prohibited from printing the expiration date.
These are on receipts from point of sales purchases (directly at the store or business).
There are many other requirements for those who use credit reporting data:
- The Fact act required federal banking agencies, the national credit union administration and the federal trade commission to come together and create regulations regarding I.D. theft prevention.
- Each institution must develop their own identity theft prevention program which will include procedures to detect, prevent,and mitigate identity theft.
- Requires USERS of consumer reports to respond to Notices of Address Discrepancies
- Requires issuers of credit cards to access validity of a change of address if they receive a change of address on a card account and additionally within a short period of time receive a request for an additional or replacement card for the same account.
Users of data must have a permissible use and be certified by the credit reporting agencies it deals with to do so.
The Fact Act requires mortgage lenders to provide consumers with a Credit Disclosure Notice (Credit Report) including their credit scores,range of scores,credit bureau scoring model and factors affecting their score.
This is usually from the credit reporting agency and sent directly to the consumer in behalf of the lender.
The proper disposal of records is another requirement.
The use and sharing of medical information can only be done so with the written permission of the consumer.
5th Reason Code Factor
When a mortgage lender or broker is acquiring a score in the event of furnishing a loan to an applicant, the credit reporting agency is required to provide a statement to the lender as to the
role of inquiries in the score particularly if the score was adversely affected by those inquiries.
This is the 5th reason code factor that is discussed in the newer FICO model.
Usually the top four reason codes are given when there is an adverse score given.
Facta requires this 5th one even though it may not be in the top four.
This makes them compliant under FACTA.
The federal trade commission has been commissioned by congress to conduct studies on the effects of the Fact Act and has sought public comment on these.
This has resulted and will continue to result in many small but important changes to the Act.
One example being that notices supplied to consumers were to be in simple language that all could understand.
This leading further to discussion of the Spanish speaking community and the availability of these rights translated for them.
Hopefully I've covered the most important points here and this helps you in your credit repair journey.
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