Fair and Accurate Credit Transactions Act (FACTA)

FACTA added new sections to the federal Fair Credit Reporting Act (FCRA, 15 U.S.C. § 1681 et seq.), intended to help consumers fight the problems of identity theft. FACTA contains provisions on accuracy, privacy, limits on information sharing and new consumer rights to disclosure.

Help for identity theft victims include:

1. Free credit reports;
2. Fraud alerts with credit bureaus;
3. Active duty alerts with credit bureaus;
4. Truncation requirements for credit cards, debit cards and Social Security Numbers; and
5. Information for victims.

FACTA incorporates several provisions that require financial institutions, creditors, and other businesses that rely on consumer reports to detect and resolve fraud by identity theft.

The so-called “red flags” and related sections of FACTA include:

• Red Flag Guidelines and requirements for credit and debit card issuers to assess the validity of a change of address request, (FACTA §114, FCRA §615(e)).
• Procedures to reconcile different consumer addresses. (FACTA §315, FCRA §605(h)(2)).