Understanding FACTA Rules Helps Keep Consumers Safe from Identity Fraud

Consumers who frequent retail establishments may be unaware of certain regulations that govern what can and cannot be printed on a receipt.

By understanding FACTA rules, a consumer can be more vigilant about keeping their private financial information close at hand.

What is FACTA?

FACTA, or the Fair and Accurate Credit Transactions Act, is a federal law that regulates information that can be printed on retail receipts. It also establishes the right for Americans to obtain a free credit report on a yearly basis from one of the three main credit reporting agencies including Experian, Equifax, and TransUnion.

The Fair and Accurate Credit Transactions Act is an amendment to the Fair Credit Reporting Act.

FACTA was passed by Congress and signed into law in 2003 in response to the growing number of incidents of identity theft. If consumers do suspect identity fraud, they can also, according to FACTA rules, place alerts on their credit histories. They can also do this if deploying overseas in order to make applying for credit in a fraudulent manner difficult.

Additionally, FACTA rules govern the kinds of information that can be printed on receipts. If private financial information is printed on a receipt and that information makes it into the hands of someone who would use it for ill gain, that consumer would be at risk for identity theft. Retailers need to abide by FACTA prohibitions to protect consumers from ID theft.

In 2008, the Debit Card Receipt Clarification Act was passed. This further clarified that both the expiration and the number of the debit card need to be truncated.

FACTA Rules for Retailers

According to FACTA rules, certain pieces of information must be omitted from a retail receipt. FACTA rules say that only the last five digits of a credit card or debit card number can be printed and under no circumstances can any part of the expiration date of that card be printed.

In essence, the only digits of a credit card or a debit card number that can be printed on a receipt are the last five. If any of the first parts of the number is printed or any other part of the number is printed on the receipt, that retailer is in violation of FACTA rules.

Retailers often truncate debit and credit card numbers. This means that the numbers are often replaced with a “#” or a “*” symbol.

If a retailer has not followed these strict FACTA rules, consumers can file lawsuits and that company may have to pay stiff fines.

Some large companies have already settled with consumers because of alleged violations of FACTA rules. Spirit Airlines paid out $7.5 million to 350,000 customers because they printed more than the last five digits of consumers’ credit card numbers.

Doctors Associates Inc, doing business as Subway, was forced to pay almost $31 million to 2.6 million customers for FACTA rules violations, and LabCorp settled with 665,000 customers for $11 million for printing too much card information on receipts.

If you suspect a retailer with whom you have done business is in violation of FACTA rules, you may be eligible for legal action.

Signs You Might Have Had Your Identity Stolen

According to Lifelock.com, many consumers may be unaware that they have been victims of identity theft. The spirit behind FACTA and the red flag rules coming out of it apply to financial institutions handling sensitive personal information to try to prevent this, but it isn’t always effective. One sign that your information may have been compromised may include an unexpected drop in your credit score. This is why FACTA allowing for a free annual credit report to individuals is vital. It allows people to review this data at least once per annum.

Along this same line is the revelation of an unexpected or unknown loan or credit card account appearing on the credit report. Secondly, a potential identity theft sign is an unrecognizable bill showing up on a monthly credit card statement. While it is entirely possible to forget some transactions or for them to appear under unusual names, most charges can be easily identified as made by the cardholder.

When credit is taken out falsely under your personally identifiable information and then not paid back—as is the usual intent, you can be denied credit when you apply for it legitimately. This can come as a shock if you believe that you have a good score and record. Unless you can pinpoint a reason for the rejection, it is a good idea to follow through and investigate.

When lines of credit go taken out illegally go unpaid, the person with the true identity may suddenly find themselves on the receiving end of collections calls. These can be harassing, painful, and difficult to straighten around. FACTA was created to try to prevent the indignity of this experience for American consumers.