The Fair and Accurate Credit Transactions Act (FACTA)

Congress enacted the Fair Credit Reporting Act (FCRA) in April 1971. This established guidelines for credit bureaus, credit reporting agencies, and creditors to follow in reporting our individual credit history. The Fair and Accurate Credit Transactions Act (FACTA - HR 2622), is the name of the new law, which amended FCRA in late 2003. It establishes uniform national standards and preempts state laws in most instances, although some states were able to maintain their own laws regulating credit reporting and consumer access. The law provides significant new consumer protections regarding resolution of disputes and identity theft, among others. Important features of FACTA are summarized below:

• Provides everybody the right to get one free credit report from each bureau each year. A special website and toll-free number were established by the FTC and the credit bureaus for consumers to request their reports.
• Gives consumers the right to obtain their credit scores from the bureaus for a reasonable fee. Mortgage lenders are required to provide consumers with a free copy of their credit score.
• Provides consumers with clear instructions on how to opt out of information sharing between affiliated companies for marketing purposes and how to stop companies from sending unsolicited offers of credit.
• Ensures that consumers are notified prior to or within 30 days if financial companies are going to report negative information about them to the credit bureaus. Allows consumers to dispute directly with data furnishers for credit reporting purposes. Furnishers may not report an account that is under dispute and must notify you either before or no later than 30 days after they have reported negative information to bureaus.
• Allows consumers to place fraud alerts in their credit reports, which may remain for up to 90 days, to prevent identity thieves from opening accounts in their names. The alert entitles consumers to a second free report so they can check for unusual activity.
• Consumers will be able to block information from being given to a credit bureau and from being reported by a credit bureau if such information results from identity theft. In addition, no debt may be turned over to a collection agency if it results from identity theft.
• Special provisions protect active duty military personnel, by allowing them to place "Active Duty Alerts" on their credit files, so creditors will know they have been deployed overseas and are not shopping locally.
• Prohibits companies from printing credit/debit card expiration dates or account number (other than the last 5 digits) on electronically printed customer receipts.
• Lenders must provide written notice to consumers if the terms of credit are higher than the prevailing market interest rates.
• Restricts access to consumers’ sensitive health information.
• Provides consumers with one-call-for-all protection by requiring credit bureaus to share consumer calls on identity theft, including requested fraud alert blocking.
• Requires creditors to take certain precautions before extending credit to consumers who have placed fraud alerts in their files.