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In December of 2003, Congress passed the Fair and Accurate Credit Transactions Act (often referred to as the 'FACT Act', or 'FACTA'), which amended the Fair Credit Reporting Act ('FCRA'), and established new regulations. The new law helps consumers understand their credit rights, understand their credit reports, and fight identity theft.

One of the most notable elements of the FACT Act is that it allows consumers to request one free credit report every 12 months. Designed to help improve the accuracy of the information contained on credit reports (by allowing consumers to review and validate their own reports), the FACT Act requires nationwide consumer reporting agencies to establish a centralized source for fulfilling requests by consumers for their credit report.

The following are key provisions of the FACT Act regarding credit reports:

  • Consumers must have greater access to credit reports and credit scores.
  • Consumers must have better information about opting out of prescreened credit offers and information sharing between affiliated companies for marketing purposes.
  • Consumers must be able to get credit scores from credit bureaus for a reasonable fee.
  • Credit bureaus must provide a free credit report annually, phased in by region, to consumers who request a copy.
  • Financial institutions that provide information to credit bureaus must ensure the accuracy and integrity of that information.
  • Financial institutions must notify members before or within 30 days after the fact that they’re reporting negative information to credit bureaus.

Additionally, the FACT Act contains key provisions regarding identity theft protections:

  • The Federal Trade Commission will develop model forms to standardize how consumers report identity theft to creditors and consumer reporting agencies. Until then, use the ID Theft Affidavit at http://www.consumer.gov/idtheft/.
  • A nationwide fraud alert system will require credit reporting agencies to ensure that any future requests are by the true consumer, not an identity thief posing as the consumer.
  • Credit bureaus must share identity theft complaints, and consumers need only make one call to receive advice and to set off a nationwide fraud alert.
  • Merchants must leave all but the last five digits of a credit card number off store receipts.
    Active duty military personnel can place special alerts on their files while deployed overseas.