FACTA Aims To Protect Consumers From Identity Theft

The more easily consumers’ credit information is passed around, the greater the risk of identity theft.

The federal Fair and Accurate Credit Transactions Act, or FACTA, protects consumers using preventative measures that consumers can enforce through civil litigation.

FACTA Credit Card Lawsuits

Congress passed FACTA in 2003 as a set of amendments to the Fair Credit Reporting Act, mainly designed to help protect consumers from identity theft.

One of the ways FACTA fights identity theft is by restricting the credit card information that merchants are allowed to print on credit card receipts. Under Section 605(g) of FACTA, the receipt may show no more than the last five digits of the credit card number.

The receipt also must not show the card’s expiration date. This prohibition applies only to electronically-printed receipts, however. Receipts printed via hand or by the older mechanical imprinting method are exempt from this requirement.

Businesses were given a grace period to update their credit card processing equipment to comply with FACTA. As of December 2006, all businesses are expected to be in compliance.

To give this prohibition some muscle, FACTA provides a legal cause of action for the consumer. Businesses that willfully fail to comply with the credit card receipt provisions of FACTA can be liable to consumers either for their actual damages or for statutory damages of between $100 and $1000 per violation.

It’s easy to see how this provision can create substantial liability for a business that violates it, as well as a major payout for consumers who catch such a business in the act. One misprogrammed credit card receipt printer can produce any number of FACTA-noncompliant receipts, creating potentially thousands of dollars worth of liability for statutory damages.

Other FACTA Identity Theft Protections

FACTA also guarantees consumers free access to their credit reports. Under FACTA, consumers are entitled to one copy per year, free of charge, of each of the three national credit reporting bureaus Equifax, Experian and TransUnion. Prior to FACTA, these reports cost consumers up to $9.50 per copy. Free access gives consumers an opportunity to routinely monitor their reports.

Consumers can order their free reports by mail or telephone, or by obtaining one from a federally-authorized credit report website.  Those ordering via the Internet should be advised that hundreds of impostor websites exist, according to a 2005 report by the World Privacy Forum.

Under special circumstances, consumers can get more than one free copy per year. Consumers who certify that they are unemployed, receiving public assistance, or have reason to believe their credit report contains inaccurate or fraudulent information are entitled to a free copy of their reports. FACTA also guarantees a free credit report for victims of identity theft.

FACTA also lets identity theft victims flag their credit records for fraud. The alert lasts for 90 days by default but can be extended as long as 7 years if the victim provides a police report that shows she is a victim of identity theft. Active duty service members, who are particularly vulnerable to identity theft, can also place an active duty alert on their records.

These alerts require any business that receives an application for credit in that consumer’s name to contact the consumer directly to confirm the application, or take certain other steps to insure against identity theft.

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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