Fair and Accurate Credit Transactions Act – What is it?

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The Fair and Accurate Credit Transactions Act (FACTA) is an amendment to the Fair Credit Reporting Act that allows consumers to request a free annual credit report from three credit reporting companies, Equifax, Experian and TransUnion. For an added fee, consumers can request a credit score with their report and information on how the score is calculated.

Identity Theft Prevention and Credit History Restoration

The FACTA also deals with identity theft prevention, including fraud alerts, what is printed on a credit card receipt, and new regulations for government agencies to detect identity theft by financial institutions.

Fraud Alerts

If a consumer believes that he/she is about to be a victim of fraud, consumer reporting agencies must place an alert on the consumer’s file for at least 90 days and notify other agencies of the alert. Consumers can request to extend the alert, and then proof of the alert would appear on any credit score issued by the agency within a seven-year period. When extending the alert, the agency would also remove the consumer’s name from any list distributed to third parties to prevent extended credit or insurance offers.

Card Information on Receipts

Under the FACTA, businesses are prohibited from printing more than 5 digits or the expiration date of a consumer’s credit or debit card on a transaction receipt. This excludes receipts that are handwritten or imprinted because that’s the only way to record the credit card number, as opposed to secure electronic means.

Red Flags Rule

This part of the FACTA requires businesses and organizations to implement a written Identity and Theft Prevention Program that is meant to detect the “red flags” of identity theft in daily operations. This rule applies to two groups: financial institutions and creditors. Financial institutions include banks, savings or loan associations, credit unions, and any other entity that deals with consumer transaction accounts. A creditor is any entity that regularly extends or renews credit.