FACTA Protections Help Keep Consumer Information Safe

Consumers concerned about the easy transferability of their credit information can enjoy some protection stemming from FACTA, or the Fair and Accurate Credit Transaction Act of 2003.

FACTA is a set of amendments to the Fair Credit Reporting Act, enacted to keep consumer information safe in the face of quickly advancing technology.

The FACTA Credit Card Receipt Rule

FACTA governs the content of electronically printed credit card receipts and debit card receipts. These receipts must show no more than the last five digits of the card number, and they must not show the card’s expiration date.

These requirements apply only to receipts printed electronically; those printed using the old mechanical imprint method or written out by hand get an exception.

Each FACTA violation can put a merchant on the hook for $100 to $1,000 in statutory damages – whether or not the consumer can prove he or she was actually harmed by the violation.

It’s easy to imagine how those damage awards can add up to a hefty sum. One misprogrammed credit card printer could conceivably put a merchant on the hook for several thousand dollars in damages.

And in cases where one type of action causes harm to a large class of potential plaintiffs, the merchant could find itself on the receiving end of a FACTA class action lawsuit.

Other FACTA Protections

A request for a new credit card, address change, or to reopen a dormant account may be a legitimate request from the consumer authorized to make it – or it may be part of a fraudulent attempt at identity theft. The FACTA Red Flags Rule is in place to spur creditors and financial institutions to be on the lookout for possible signs of fraud.

This rule requires businesses that handle consumer credit reports to adopt a plan to detect and prevent identity theft. Businesses are now expected to be on the lookout for many different FACTA red flags, such as:

• A fraud alert on a consumer’s credit report, placed by that consumer
• Unusual changes in a consumer’s use of their credit, like a sudden increase in inquiries or new accounts
• Use of contact information known to have been used in previous fraud attempts
• Use of accounts that have been inactive for a long time
• Use of a Social Security number associated with a deceased person, or a number that has never been issued

FACTA also requires businesses that use consumer report data to put in place proper document disposal procedures. The FTC provides guidance for businesses as to what best practices satisfy this requirement.

Whether the records are electronic or on paper, businesses should destroy them in a way that prevents them from being read or reconstructed.

The FTC also recommends hiring a reputable document disposal service after conducting due diligence to vet the service’s ability to comply with the disposal rule.

The disposal rule applies to any business that handles consumer report information. The FTC specifically mentions certain types of businesses likely to handle this sort of information on a regular basis, such as:

• Consumer reporting companies
• Lenders
• Insurers
• Employers
• Landlords
• Government agencies
• Mortgage brokers
• Automobile dealers
• Attorneys or private investigators
• Debt collectors

Individuals who get credit reports on prospective household employees are also subject to the rule.

Free FACTA Class Action Lawsuit Investigation

If you made one or more purchases and the retailer provided you with a receipt that contained more than the last five digits of your credit or debit card number or the expiration date, you may be eligible for a free class action lawsuit investigation and to pursue compensation for these FACTA violations.

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