What You Should Know About the FACT Act
The Fair and Accurate Credit Transactions Act, or the FACT Act, was passed in 2003 as an amendment to the Fair Credit Reporting Act. It’s passing gave consumers some powerful weapons in regards to being proactive against identity theft, yet many people don’t realize what benefits the FACT Act provides. From being able to get free credit reports from the credit bureaus every 12 months to being able to place fraud alerts on your credit reports to eliminating credit card numbers from receipts, consumers are able to get a lot of protections now that they weren’t able to have before.
Here’s what the FACT Act does for you:
1. You Get 1 Free Credit Report from Each Credit Reporting Agency Every 12 months
Through the FACT Act, the three major credit reporting agencies, which are Equifax, Experian, and TransUnion, set up the website AnnualCreditReport.com. This is an easy place for you to be able to request in writing a credit report from any or all of the credit reporting agencies. You are allowed one free credit report every 12 months from each agency, so many consumers choose to make a request for one every four months from just one of the agencies so that they have a more consistent review of their credit. Besides the website, you can also request your free credit report in writing by sending a letter directly to the credit reporting agency of your choice through standard mail.
2. You Are Able to Place a Fraud Alert on Your Credit
If you suspect that your identity has been compromised, you can request a fraud alert to be placed onto your credit report through any of the credit reporting agencies. Once you have placed a fraud alert at one agency, this alert will then update to the other two. An initial fraud alert can last for up to 90 days, and when identity theft has been confirmed, this fraud alert can last up to 7 years. In addition, anyone who is actively serving in the military can have a fraud alert placed on their credit report for up to 12 months. You can learn more about fraud alerts through this informative blog post as well.
3. No More Credit Card Numbers on Your Receipts
If you keep your tax records for seven years or more, then chances are you can go digging into that box or file and find some point of sale receipts there. Chances are they contain your entire credit card or debit card number on that receipt. Fast forward to today where thanks to the FAST Act, all card numbers must be truncated to only display four or five of those numbers. Often it is displayed as XXXX-XXXX-XXXX-1234 these days. This was done because a fast majority of people simply crumple up their receipts and then throw them away in the nearest trash can… which was a very easy way for identity thieves to get their hands on a valid number. You’ll also notice that there aren’t any expiration dates on receipts any more as well, and this is for the exact same reason for truncating the numbers.
4. Help to Identity Possible Identity Theft
Sometimes referred to as the “Red Flags” rules, the FACT Act required the formation of regulations by the major Federal finance agencies involved in consumer finance to help people discover identity thieves as quickly as possible. This boiled down to three basic points:
It requires financial institutions or creditors to develop and implement an Identity Theft Prevention Program in connection with any account they hold and it must include reasonable policies and procedures for preventing, detecting, and resolving identity theft event;
It requires users of consumer reports to respond to Notices of Address Discrepancies that they receive when there is more than one permanent address for a consumer; and
It places special requirements on issuers of debit or credit cards to assess the validity of a change of address if they receive notification of a change of address.
These Red Flag regulations are intended as a measure to help keep you safe from circumstances that could be out of your direct control. Identity thieves have always held an arsenal of weapons that they can use to gain access to a victim’s identity – these implemented regulations are designed to help give consumers weapons to defeat identity thieves before they can strike.5. Blocking Information that Occurs Because of Identity Theft
An identity thief can create a lot of damage for their victims. It could just be from spending money on existing accounts, or it could be the opening of new accounts, maxing out those credit lines, and then not paying them. It could be that a false name was given when an identity thief is arrested, thereby putting an arrest on a victim’s record. It could even be pretending to be the victim in order to receive medical treatment and coverage, and then not paying for it.
Thanks to the FACT Act, the false information that is generated thanks to the identity thief’s activities is to be blocked from your permanent record once contested. This means that potential lenders will not be able to see any accounts in collection thanks to the activities of an identity thief, false judgements, or anything else that could have a negative impact on your application.
In addition to these five key points, it was also mandated that consumers have access to specific resources to gain the help they need should they discover that they have become the victim of identity theft. Despite all of these efforts, however, identity theft is still the fastest growing crime right now in the United States. Why? Because people simply haven’t taken the time to empower themselves with the knowledge they need to combat identity theft effectively. For some it’s because they feel invulnerable. For others it is because they just don’t care. Then there are those who just don’t realize that identity theft is a problem.
Until we all fight back against the identity thieves, there will always be new victims because identity thieves profit to the tune of $40,000,000,000 every single year. Be sure to request your free credit reports every 12 months, sign up for an effective identity theft protection plan, and take the fight to the identity thieves today.
Tim is a freelance journalist who writes on everything from personal finance to investing and credit. He spends his spare time traveling, paddle boarding and working with local charities. He has a B.A. in English Literature from Oklahoma State University and lives with his wife and children in Phoenix, Az.