Fair and Accurate Credit Transactions Act (FACTA)

What Is the Fair and Accurate Credit Transactions Act (FACTA)?

The Fair and Accurate Credit Transactions Act (FACTA) is a federal law enacted by the United States Congress in 2003. Its stated purpose was to upgrade consumer protections, especially comparable to identity theft.

The most notable feature of the Act is that it gave all residents of the U.S. free access to their credit reports when each year through the website www.annualcreditreport.com.

Understanding the Fair and Accurate Credit Transactions Act (FACTA)

Because of FACTA, there were various reforms executed connected with the utilization and protection of consumer data. For instance, it increased the level of oversight that lenders, payment processors, and regulators must give while proactively looking to suspicious transactions. Also, it permitted consumers to register fraud alerts all alone credit cards, to alert the specialists when thought fraud has occurred.

FACTA was passed under the administration of then-President George W. Bush in response to an increase of occurrences of identity theft. Sadly, identity has just increased in pervasiveness starting around 2003 in light of an increase in [e-commerce](/web based business), social networking, and other online activities.

Notwithstanding its provisions planned to reduce identity theft, FACTA likewise contained measures intended to generally reinforce consumer protection instruments more. For example, it placed new requirements on mortgage lenders to reveal the credit scores and different factors that impacted their decision about the decision about whether to endorse a mortgage request. This incorporates delivering to customers the alleged "risk-based-pricing" factors utilized in their decision, as well as a specific issues noted on the consumer's credit report.

However less apparent to consumers, FACTA likewise included many new rules for businesses and financial service suppliers. Specifically, it permitted enforcement agencies to make a move on any infringement of "Red Flag Rules." Red Flag Rules require creditors and financial institutions, for example, banks and credit unions, to carry out identity theft prevention programs that help recognize and prevent identity theft. For instance, issuers of credit and debit cards must do whatever it may take to approve any changes to customers' locations.

One of the potentially negative side-effects of FACTA is that it might have contributed to the amount of personally identifiable data that businesses are required to get from their customers. For instance, a business that is required to affirm the identity or whereabouts of a customer in a more thorough way because of FACTA might have to request various forms of identification to meet certain provisions of FACTA. From one perspective, these changes could make the business and consumer less helpless against identity theft or different types of fraud. Notwithstanding, if a hacking or theft of that business' records happens from here on out, there is possibly more data accessible to be accessed about that business' clientele, and this can possibly be more harming for consumers.

Features

• FACTA is basically known for its provisions against identity theft.
• The Fair and Accurate Credit Transactions Act (FACTA) is a federal law passed in 2003 intended to upgrade consumer protections.
• Sadly, identity theft is still on the rise as consumers' social and purchasing designs keep on moving online.