Understanding the Fair and Accurate Credit Transactions Act

There are so many laws and regulations that it is difficult to keep up with the changes.  In general laws are enacted to protect our rights so it is important to understand anything new that could affect you.  In 2003 Congress passed the Fair an Accurate Credit Transaction Act, or FACTA, as a federal law allowing consumers to have access to free credit reports.  Every consumer has the ability to request an annual free credit report from Experian, Equifax, and TransUnion.  This FACTA law has implications for everyone, making it important to understand the ins and outs of the law, along with the protection it affords consumers.

An important piece of FACTA regulations is that it addresses identity theft.  It allows consumers who suspect identity theft to flag their credit history to indicate the suspected transactions, making it more difficult for someone to use their credit information.  In theory this should protect victims of identity theft, and should prevent the credit companies from holding fraudulent charges against the victim’s credit history. 

While for the most part the FACTA US law has protected the rights of consumers, there is a delay and backlog with the credit reporting companies.  There is also concern over the fact that FACTA preempts all state laws, even if those state laws that are stricter than the federal law.  This is a valid concern, and the reason that FACTA training is critical for anyone working with consumers and credit information.

As a practical application of FACTA, think about all of the things that consumers pay for every day.  Our social security numbers are attached to everything, and all of our payments or lack thereof is reported back to the credit bureau.  Knowing that mistakes are made, and identity theft is a reality, as consumers we want to know that our information is protected.  As business owners we want to ensure the protection of our customers.  It is for this reason that companies invest in programs and software that protects our information.

One expense that almost all consumers have is rent or a mortgage.  As an owner or property manager, it is important to know about the real estate accounting software and real estate property management software available to track and record payments of clients.  The software should be secure, and as it deals with money, credit information, and identifying numbers for clients, the information could allow a hacker access to hundreds of consumers.    

There are a lot of reasons and examples as to why businesses should invest in protecting confidential information.  While federal laws protect us as consumers, it is after the theft occurs that the laws take effect.  Anything that can be done proactively to protect the consumer is even more valuable.