FACTA Identity Protection Laws Help Keep Consumer Credit Info Safe

FACTA, the Fair and Accurate Credit Transactions Act, is a set of identity protection laws that impose certain duties on the part of entities that handle consumer’s credit information and also creates tools that consumers can use to actively protect themselves from fraud.

Congress enacted FACTA in 2003 as a set of amendments to the Fair Credit Reporting Act in response to the growing problem of fraud using consumers’ credit and debit card numbers.

Identity Protection Laws Within FACTA

FACTA created a batch of new identity protection laws to guard consumers against identity theft and credit fraud. Some of these protections have since become familiar to many consumers.

For example, one provision of FACTA allows individuals to get a free copy of their credit reports from all three of the major reporting bureaus once a year.

Other identity protection laws under FACTA allow victims of identity theft to flag their credit reports with an identity theft alert. Current military service members on active duty can request an active duty alert to help guard them against credit fraud while they’re stationed abroad.

Both these types of alerts require a business to contact the consumer before extending credit requested in the consumer’s name, or to take other “reasonable steps” to confirm the application for credit is not fraudulent.

If identity theft does occur, FACTA gives the victim certain (though not unlimited) rights to request paperwork used by the identity thief in committing the fraud. With some exceptions, businesses are required to disclose this information at the victim’s request.

Other FACTA identity protection laws create a duty on financial institutions, business, and other entities that might handle or rely on a consumer’s credit information to look for certain “red flags” – potential indicators of identity fraud.

Unusual patterns of credit use, documents that appear to have been forged, or fraud alerts on the consumer’s credit report are all potential red flags.

The FACTA Truncation Rule

One of the more potent consumer protections that FACTA provides is known as the truncation requirement. This requirement prevents identity thieves from getting sensitive information from the receipts generated by credit and debit card transactions.

Under the truncation requirement, businesses that accept payment via credit or debit cards may print no more than the last five digits of the card number on any electronically-printed receipt given to the customer at the point of sale. The card’s expiration date must also not be printed.

What makes the truncation requirement powerful is its provisions for a civil cause of action, in which the consumer can seek significant statutory damages against the noncompliant business. Consumers who receive a receipt that does not comply with FACTA can sue the business that printed it.

If the consumer can show that the violation was “willful,” FACTA’s statutory damage provisions kick in. Each such violation can put the defendant business on the hook for $100 to $1,000 in statutory damages

In FACTA lawsuits brought as putative class actions, those damages can quickly add up to impressive amounts. Some FACTA class action lawsuits have been filed that allege several millions or even billions of dollars in statutory damages.

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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