Protecting Your Credit- The FACT Act in Layman's Terms (Part 2)
By Amy L. Cooper Arnold, CardRatings.com Credit/Debt Managment Reporter
Editor's Note: This article is the second in a two-part series containing consumer tips regarding the rights of consumers under the Fair and Accurate Credit Transactions Act (FACT Act). Please click here to read the first article in this series.
Protecting the Essentials
Identity thieves are after your credit card, debit card, and social security numbers. Once stolen, the thief can easily masquerade as you opening accounts and making purchases.
In a 2004 prepared statement before the subcommittee on social security of the House Committee on Ways and Means, the Federal Trade Commission said, “The potential for misuse arises because Social Security numbers are crucial to the proper functioning of our financial system. Social Security numbers are used to match consumers to their credit and other financial information.”
The report continues, “Without them, information may be attributed to the wrong consumer, and the accuracy of credit reports may be degraded. Enabling Social Security numbers to be used appropriately will help to ensure that consumers continue to enjoy the benefits of our current credit system.”
To help protect these vital numbers, the Fair and Accurate Credit Transactions Act (FACTA) has put into effect a national standard of not fully printing social security numbers, and credit and debit card numbers on credit reports and receipts. When you request your free credit report, request that your SSN be printed with only the last four digits.
Fight Back Against Identity Theft
Download An FTC Publication in Response to FACTA
AND LEARN...
Debit and credit card receipts may only print the last five numbers of the account or the expiration date. This provision will take time before going into full effect, and it does not include merchants who use only handwritten or imprinted receipts. Merchants have three years to comply if their machines were put into use before January 1, 2005. And if their machines are put into use after January 1, 2005, then they have one year.
Under FACTA, businesses are also required to take steps to protect credit card, debit card, and social security numbers. The FTC and banking regulators worked together to layout guidelines to make sure sensitive consumer information is protected through the proper disposal of information no longer needed by the company. While the provision gives specific examples that meet the disposal standard, it remains flexible allowing businesses to determine the best method based on the degree of the information’s sensitivity, the costs of different methods, and changes in technology.
Provisions for Victims of Identity Theft
If you are a victim of identity theft, once you submit an identity theft report to the credit reporting agency they must immediately stop reporting the information in your credit file. The credit reporting agency must then also notify the creditor reporting the fraudulent information, which must in turn also stop reporting the information. From that point on the creditor cannot sell, transfer, or place into collection the debt that resulted from the identity theft. You may also want to give the identity theft report directly to the creditor to prevent them from continuing to report the fraudulent information.
In order for this block to take effect you must provide appropriate information to verify your identity—full name, current or recent full address, full SSN, and/or date of birth. Additional proof including copies of government-issued identification documents, utility bills, and answering questions only you would know may also be requested.
In addition, you are entitled to receive copies of the thief’s application and account transactions, which can also be given to any law enforcement agency at your request. You will have to provide proof of your identity, and the business you request the information from may also require a copy of the police report and identity theft affidavit. Send your written request to the business at the address they specify along with all information including dates and account numbers. This documentation will help prove you have been a victim; for example, by proving the signature is not yours.
Creditors are also now required to give you notice before any negative information is given to the credit reporting agencies. While this may help you catch fraudulent activity early on, you must still be diligent about checking your credit report yearly. Keep in mind that an identity thief usually gives creditors an address different from yours, so you may in fact never receive the early warning. In addition, if you happen to throw the notice out there is no second chance as creditors are required to notify you only once.
Credit Scores
Through the measures implemented by FACTA, the magic behind the number creditors use to determine your eligibility for loans and lower rates has been revealed. You can request not only your credit score, but also an explanation of the factors used to compute the score; however, unlike free credit reports, you will be charged a fee for your score. The largest credit scoring company, Fair Isaac & Co., has released details on their method of calculating scores. Read our article On the Path to a High Credit Score to learn the details.
In summary, the FACT Act has many family consumer-friendly provisions that can help consumers protect their credit and identity. Weston sums it up best,
For more information on FACTA, visit the FTC web site and click on the link entitled Fair Credit Reporting Act.
We welcome your comments about credit and money issues in our popular credit forum!
Amy L. Cooper-Arnold has been a reporter for CardRatings.com since 2004. Her articles have been republished by respected publications throughout the country, including Young Money Magazine, E/The Environmental Magazine and About.com. Amy recently graduated with honors from Austin Peay Univ. and is currently taking graduate-level classes.
CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.
Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thanks for your interest!
Editor's Note: This article is the second in a two-part series containing consumer tips regarding the rights of consumers under the Fair and Accurate Credit Transactions Act (FACT Act). Please click here to read the first article in this series.
Protecting the Essentials
Identity thieves are after your credit card, debit card, and social security numbers. Once stolen, the thief can easily masquerade as you opening accounts and making purchases.
In a 2004 prepared statement before the subcommittee on social security of the House Committee on Ways and Means, the Federal Trade Commission said, “The potential for misuse arises because Social Security numbers are crucial to the proper functioning of our financial system. Social Security numbers are used to match consumers to their credit and other financial information.”
The report continues, “Without them, information may be attributed to the wrong consumer, and the accuracy of credit reports may be degraded. Enabling Social Security numbers to be used appropriately will help to ensure that consumers continue to enjoy the benefits of our current credit system.”
To help protect these vital numbers, the Fair and Accurate Credit Transactions Act (FACTA) has put into effect a national standard of not fully printing social security numbers, and credit and debit card numbers on credit reports and receipts. When you request your free credit report, request that your SSN be printed with only the last four digits.
Fight Back Against Identity Theft
Download An FTC Publication in Response to FACTA
AND LEARN...
- How identity theft occurs.
- What immediate steps to take if you have been the victim of identity theft.
- How to resolve specific problems such as fraudulent withdrawals, bankruptcy fraud, mail theft, passport fraud, tax fraud, etc.
- Tips for staying alert.
- Ways to minimize recurrence.
- About your computer and identity theft.
Debit and credit card receipts may only print the last five numbers of the account or the expiration date. This provision will take time before going into full effect, and it does not include merchants who use only handwritten or imprinted receipts. Merchants have three years to comply if their machines were put into use before January 1, 2005. And if their machines are put into use after January 1, 2005, then they have one year.
Under FACTA, businesses are also required to take steps to protect credit card, debit card, and social security numbers. The FTC and banking regulators worked together to layout guidelines to make sure sensitive consumer information is protected through the proper disposal of information no longer needed by the company. While the provision gives specific examples that meet the disposal standard, it remains flexible allowing businesses to determine the best method based on the degree of the information’s sensitivity, the costs of different methods, and changes in technology.
Provisions for Victims of Identity Theft
If you are a victim of identity theft, once you submit an identity theft report to the credit reporting agency they must immediately stop reporting the information in your credit file. The credit reporting agency must then also notify the creditor reporting the fraudulent information, which must in turn also stop reporting the information. From that point on the creditor cannot sell, transfer, or place into collection the debt that resulted from the identity theft. You may also want to give the identity theft report directly to the creditor to prevent them from continuing to report the fraudulent information.In order for this block to take effect you must provide appropriate information to verify your identity—full name, current or recent full address, full SSN, and/or date of birth. Additional proof including copies of government-issued identification documents, utility bills, and answering questions only you would know may also be requested.
In addition, you are entitled to receive copies of the thief’s application and account transactions, which can also be given to any law enforcement agency at your request. You will have to provide proof of your identity, and the business you request the information from may also require a copy of the police report and identity theft affidavit. Send your written request to the business at the address they specify along with all information including dates and account numbers. This documentation will help prove you have been a victim; for example, by proving the signature is not yours.
Creditors are also now required to give you notice before any negative information is given to the credit reporting agencies. While this may help you catch fraudulent activity early on, you must still be diligent about checking your credit report yearly. Keep in mind that an identity thief usually gives creditors an address different from yours, so you may in fact never receive the early warning. In addition, if you happen to throw the notice out there is no second chance as creditors are required to notify you only once.
Credit Scores
Through the measures implemented by FACTA, the magic behind the number creditors use to determine your eligibility for loans and lower rates has been revealed. You can request not only your credit score, but also an explanation of the factors used to compute the score; however, unlike free credit reports, you will be charged a fee for your score. The largest credit scoring company, Fair Isaac & Co., has released details on their method of calculating scores. Read our article On the Path to a High Credit Score to learn the details.
In summary, the FACT Act has many family consumer-friendly provisions that can help consumers protect their credit and identity. Weston sums it up best,
"You need to stay on top of your credit because it really does affect your whole financial life!"
For more information on FACTA, visit the FTC web site and click on the link entitled Fair Credit Reporting Act.
We welcome your comments about credit and money issues in our popular credit forum!
Amy L. Cooper-Arnold has been a reporter for CardRatings.com since 2004. Her articles have been republished by respected publications throughout the country, including Young Money Magazine, E/The Environmental Magazine and About.com. Amy recently graduated with honors from Austin Peay Univ. and is currently taking graduate-level classes.CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.
Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thanks for your interest!
posted by CardRatings.com at 11:31 AM
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