Definition of fair and accurate credit transactions act of 2003 (FACTA)

legislation designed to help consumers protect their credit identities and recover from identity theft. Among the key provisions of the law:

1. Free credit report. Consumers are entitled to one free copy of their credit report annually from each of the three credit bureaus (Equifax, Experian, and Trans Union) by calling 877-322-8228 or logging on to www.annualcreditreport.com.
2. Fraud alerts. Consumers were given the right to contact a credit reporting agency to order a fraud alert if they become victims of identity theft. The fraud alert is effective for 90 days and may be extended for as long as seven years. If a consumer has instituted a fraud alert, any creditor that is asked to extend credit must contact the consumer by phone to make sure that the credit application was not made by an identity thief. The National Fraud Alert System is to be set up to track fraudulent activity.
3. Blocking inaccurate information. Victims of identity theft are given the right to block inaccurate items that appear on a credit report because of the identity theft.
4. Account number truncation. Receipts for credit and debit card transactions may no longer include more than the last five digits of the card number or the expiration date. Consumers who request a copy of their credit file from a credit bureau may also request that the first five numbers of their Social Security number not be included in the file.
5. Imposter information. Victims of identity theft must be given the imposter's account application and transactions in order to be able to find and prosecute them.
6. Collection agencies. If an identity theft victim is contacted by a collection agency about a debt that resulted from the theft, the collection agency must inform the creditor of the fraud. The victim is also entitled to receive all information about the debt, such as the application, account statements, and late notices. Creditors cannot place this debt into collection or sell the debt once they are notified of the theft.
7. Red flags. Creditors must adopt procedures to spot identity theft before it occurs. Events such as change of address, request for replacement cards, and efforts to reactivate dormant card accounts must be considered potential signs of fraud.
8. Consumer rights notice. Credit reporting agencies are required to give identity theft victims notice of their rights. These include the right to file a fraud alert, to block fraudulent information from getting on the credit report, and the right to obtain copies of documents used to commit the fraud.
9. Credit scores. Consumers may request their credit score from credit reporting agencies including an explanation of the factors that went into computing the score, for a reasonable fee.
10. Disputing inaccurate information. Consumers may dispute inaccurate information on their credit reports directly with the furnisher of the information, rather than with the credit reporting agency. Once notified, the furnisher of the information must investigate and cannot report negative information while the investigation is pending. Furnishers who have been notified that the information is the result of identity theft must not report it to a credit reporting agency.
11. Notice of negative information. Consumers must be given "early warning" notice before negative information is reported to a credit reporting agency. Financial institutions must send consumers notice before or no later than 30 days after negative information is furnished to a credit bureau. Negative information includes late, partial, or missed payments, or any other form of default on the account.
12. Medical information and credit reports. Consumer reporting agencies may not report the name, address, or telephone number of any medical creditor unless the information is provided in codes that do not identify the provider of medical care or the individual's medical condition. Creditors may also not obtain or use medical information to make credit decisions.
13. Opt-out marketing. Consumers are given the right to opt out to stop a corporation's affiliates from sharing consumer data for marketing purposes.
14. Risk-based pricing. Consumers who are offered credit on terms that are materially less favorable than others must receive a notice of this fact. Therefore, consumers who might be approved for a loan, but at a much higher interest rate than a standard applicant, must be notified and get a free copy of their credit report.