FACTA, officially known as the Fair and Accurate Credit Transactions Act (FACTA), is a federal law designed to safeguard consumers’ personal and financial information. Enacted in 2003 as an amendment to the Fair Credit Reporting Act (FCRA), FACTA has since been updated with additional provisions.
FACTA was designed to give consumers more control over their credit information and prevent identity theft. It includes several provisions that require financial institutions and other organizations that handle personal data to take certain precautions for protecting consumers’ data.
One of the key provisions of FACTA is its requirement that financial institutions and creditors offer consumers a free credit report every 12 months. This provision enables consumers to monitor their credit reports for errors, unauthorized accounts, or fraudulent activity.
FACTA also mandates that credit and debit card receipts no longer include the full card number to reduce the risk of identity theft. Instead, only the last five digits, along with an expiration date, must be printed.
Additionally, FACTA includes provisions related to the secure disposal of sensitive consumer information. Businesses that collect personal or financial data about consumers must take reasonable steps to safeguard and destroy that data securely.
FACTA grants consumers the right to request a fraud alert be placed on their credit report if they believe they have been the victim of identity theft. This alert requires creditors to take extra steps in verifying the identity of someone applying for credit.
Historical Information About FACTA:
- Passed in 2003, FACTA has been in force ever since.
- FACTA was passed to protect consumers from identity theft and credit fraud. Under this law, credit reporting agencies must offer free annual credit reports to all consumers each year.
- FACTA requires businesses to securely dispose of sensitive personal information, and notify customers in the event of a security breach.
- Violations of FACTA can result in fines up to $2,500 for each violation, as well as lawsuits filed by affected individuals or the Federal Trade Commission.
Enforcement of FACTA is handled by several government agencies, such as the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB).
FACTA is an essential federal law that safeguards consumers’ personal and financial information. It gives individuals access to their credit reports, safeguards against identity theft, and requires organizations handling sensitive data to take certain precautions for protecting customer data. In short, FACTA ensures consumers’ security when handling sensitive data.
If you’re worried about your credit information and want to learn more about your rights under FACTA, reach out to a credit counseling agency or consumer rights attorney for assistance.
FACTA Regulation
FACTA is overseen by several government agencies, such as the FTC and CFPB. These organizations are accountable for upholding the law and making sure organizations that handle sensitive consumer information abide by applicable rules.
Under FACTA, businesses are required to take reasonable measures to safeguard consumers’ personal information against unauthorized access, disclosure, or use. This includes employing security measures like password protections, encryption, and firewalls as well as secure disposal methods for sensitive data.
FACTA requires businesses to have a written policy for the proper disposal of sensitive consumer information. This document should outline guidelines for the destruction or deletion of physical and electronic records, as well as instructions for employees on how to abide by this policy.
Additionally, FACTA requires businesses to notify consumers if there has been a security breach that has compromised their personal or financial information. These notifications must be made as quickly as possible and include details about the steps the business is taking to mitigate the effects from this incident.
FACTA regulations aim to safeguard consumers’ personal and financial information, and guarantee businesses handling sensitive data take reasonable measures to secure it from unauthorized access or use. If you have any doubts about a business’ adherence to FACTA, you can contact either the FTC or CFPB to file a complaint.
