Volume V
4th Quarter 2004

Fair and Accurate Credit Transactions Act of 2003

employeescreenIQ clients should immediately update their Pre-Adverse Action Notice to reflect the updated version of the document “A Summary of Your Rights Under the Fair Credit Reporting Act

On December 4, 2003, President Bush signed into law the Fair and Accurate Credit Transactions Act of 2003 (FACTA) as a response to the growing threat of identity theft and its effect on consumers applying for mortgages and other forms of credit. On November 30, 2004, The Federal Trade Commission released updated final versions of four documents covered by the FCRA. The deadline for implementation of documents resulting from FACTA is January 31, 2005. All employeescreenIQ clients should familiarize themselves with the new documentation linked below:

In practice, FACTA means that any organization utilizing a Consumer Reporting Agency (employeescreenIQ) for employment screening purposes must update their Pre-Adverse Action Notice and Adverse Action processes to include the revised version of “A Summary of Your Rights Under the Fair Credit Reporting Act” document. All BIS clients should immediately begin using the updated version of this document.

The following paragraphs are the Federal Trade Commission’s language on FACTA:

FTC Notice:
It is very important that you download, read and understand these materials. In November the Federal Trade Commission issued final summaries of identity theft and general consumer rights and revised furnisher and user notices under the Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act of 2003 (FACTA). Consumer reporting companies are required to notify consumers of their rights under FACTA and steps they can take to protect themselves against identity theft and difficulties resulting from identity theft.

The identity theft rights summary includes the major new identity theft rights granted to consumers by FACTA, including the right to place fraud alerts on their credit reports, to block businesses and credit bureaus from reporting information in their credit files that is a result of identity theft, and to obtain from businesses information about accounts or transactions in their name that result from identity theft. The identity theft rights summary will be provided by consumer reporting companies to consumers who contact the agencies because they believe they are victims of fraud or identity theft.

The general consumer rights summary includes, among other things, consumers' right to see their credit files and know when they have been used against them, to correct inaccuracies, and to opt-out of unsolicited offers. The summary also notes that, in addition to identity theft victims, active duty military personnel have additional rights under the FCRA and FACTA. This general summary of rights updates the current summary, which credit reporting companies provide to consumers with their credit reports. The furnisher and user notices explain to businesses their duties under the FCRA.

The FTC received 50 comments from individuals, businesses, and associations. In response to these comments, the Commission has made some changes to the proposed summaries and notices it issued in July 2004, including: (1) the addition of a Spanish-language statement at the top of the summary of rights indicating where Spanish-speaking consumers may go to obtain more information in Spanish; (2) clarification that a consumer must contact the nationwide consumer reporting companies to request that a fraud alert be placed on his or her credit file, and that the initial alert remains in a consumer's file for at least 90 days; and (3) clarification that a consumer may request that a consumer reporting company block any information, not just account information, in the consumer's file if the information is the result of identity theft.

The Commission vote to approve the final rule and the publication of the Federal Register notice was 5-0.

Copies of the Federal Register notice are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.