Several provisions of the Fair and Accurate Credit Transactions Act are designed specifically to help prevent identity theft and make it easier for you to repair your credit if you have been a victim of identity theft.
The first of these, of course, are the new regulations that make it easy for you to get your credit report free once every twelve months from each of the major credit reporting agencies. One of the reasons that identity theft and the credit card fraud that accompanies it is so damaging is the fact that most consumers have no idea that new credit card accounts and lines of credit are being opened in their names until the damage is done. By providing a means for you to get your credit report free once a year, the FACT allows you to check your credit report for any accounts that you don’t recognize.
The second most important is the establishment of a national Fraud Alert System. The fraud alert system allows you to put a fraud alert on your credit report if you believe that you may have been the victim of identity theft or credit card fraud. The FACT tightens requirements on credit reporting agencies to make it easier for you to notify all agencies with one phone call. With an alert on your credit report, anyone who requests a copy must be informed that there’s suspicion of fraudulent use of your identity to obtain credit. With that information, they can take more stringent efforts to determine identity.
Other provisions of the law make it more difficult for identity thieves to get their hands on identifying information that they can use in establishing credit in your name. One of those provisions is that all credit card numbers on receipts be truncated – shortened – so that employees and others with access to receipts and other records don’t have access to your full name AND credit card number. In addition, the FTC is developing regulations regarding the disposal of sensitive credit and consumer information so that records that contain information like credit card numbers and addresses aren’t just tossed in a dumpster where anyone can find them.
The Federal Trade Commission, the agency in charge of developing and enforcing credit regulations, is mandated by this law to work with financial agencies and banking institutions to identify ‘red flags’. By identifying patterns that suggest credit card fraud and identity theft, they can take steps to prevent or at least nip credit card fraud and identity theft in the bud.
FACT also contains sections that are meant to make it easier for you to repair your credit after a case of identity theft. Those provisions include:
- Credit reporting agencies must stop reporting information once a consumer has established that they were a victim of fraud
- Companies are required to provide you with copies of records involved in cases of identity theft. Having copies of actual credit card transactions may make it easier for you to prove your case.
- You may report accounts affected by identity theft directly to creditors rather than going through the credit reporting agencies, thereby stopping the spread of misinformation more quickly.
According to a report given in testimony to the House Ways and Means Committee, “These provisions should help to reduce the incidence of identity theft, and help victims recover when the problem does occur ,”
