The Fair and Accurate Credit Transactions Act (“FACTA”) was a major piece of legislation passed by Congress to supplement the Fair Credit Reporting Act. Many of its provisions are designed to aid consumers who have been victimized by identity thieves and to prevent it. These provisions include:
    • Fraud alerts can be placed on credit files by the consumer.
    • Active duty alerts can be put on credit file for active duty military personnel.
    • A consumer must receive an adverse action notice if credit granted is at a less advantageous rate than others receive.
    • Consumers have a right to one free credit report annually.
    • The standard for furnisher accuracy has been changed from “knows or consciously avoids knowing” to a higher standard of “knows or has reasonable cause to believe” information is accurate.
    • Consumers may now dispute information and initiate investigations directly with furnishers of information such as credit card issuers. When a consumer submits a proper identity theft report, the furnisher cannot send or forward information to a credit bureau.
    • Third party debt collectors must report to a furnisher of information any identity theft that a debtor reports to them.
    • Credit and debit card numbers must be truncated or shortened on consumer receipts. Consumers can request that their social security number be truncated on their credit report.
    • Credit scores and how they are determined must be disclosed to consumers for a reasonable fee (to be determined by the FTC).
    • Consumers can prohibit the sharing of information by affiliates that will be used to for marketing purposes.
    • A report to an employee by a third party investigator is no longer a consumer report but employees must be given an adverse action report if any adverse action is taken based on the report.
    • Additional limits are placed on the sharing of information.
    • Red Flag Guidelines have been a hotbed of controversy. The FACTA calls for the establishment of procedures to identify practices, patterns and specific forms of activity that indicate possible identity theft. Specifically the act has put the onus on business owners to identify their customers whom they suspect of committing identity theft.
    • Block Information on Credit Report. A consumer can block any information that he identifies is the result of an identity theft. The block must be put into place no later than 4 days after receipt of:
      1. Proof of the consumer’s identity;
      2. An identity theft report;
      3. Identification of the information to be blocked;
      4. A statement by the consumer that the information blocked does not relate to any transaction by the consumer;
    • Prevention of Refurnishing of Fraudulent Information. Credit Reporting Agencies (“CRAs”) must have policies and procedures in place to prevent blocked information from being refurnished by a furnisher. If a consumer submits an identity theft report directly to the furnisher such as a credit card company, that company may not furnish the information to any CRA unless the entity subsequently learns that the information is correct.
    • Debt collectors now have duties under the FCRA to report identity theft to their clients. This is a completely new duty on the part of debt collectors. If in the course of dunning a debtor (making repeated and insistent demands), they learn that the debt is the result of identity theft, they must report that to their client. A consumer making the allegation of identity theft has the right to demand that the business provide to them and/or law enforcement agencies, information about the transactions. The business must provide those records evidencing the transaction that are under the businesses’ control within 30 days of the request.
IIf you think your rights have been violated, call Attorney Gary Nitzkin, toll free at (888) 293-2882. The call is free and the advice is priceless. You can also email him at [email protected].