Jeanette A. Tucker, Merrill, Thomas A. | 11/29/2006 11:38:54 PM
"This new legislation amends the current Fair Credit Reporting Act to provide consumers, businesses, consumer reporting agencies and regulators with important new tools that expand access to credit and other financial services for all Americans, enhance the accuracy of consumer’ financial information and help fight identity theft," LSU AgCenter family economist Dr. Jeanette Tucker explained.
President Bush signed the Fair and Accurate Credit Transactions Act of 2003 into law Dec. 4.
"Beginning Jan. 1, 2004, the new provisions will make it easier for consumers to deal with their credit files," Tucker said, adding, "One of the key new provisions is the consumer’s right to request a free copy of their credit reports once a year from each of the credit reporting agencies."
Consumers also will have the right to see their credit scores, which are used by lenders when making lending decisions.
"Not only can consumers see their credit scores, but there’s a provision in the law that says when consumers request free credit reports, the credit reporting agencies must notify consumers of their right to get their credit scores and also include an explanation of factors that may have a negative affect on their scores," Tucker said. "In addition, the act ensures that consumers are notified before merchants report negative information about their accounts to the credit bureaus."
A second primary objective of the act is to help prevent identity theft before it occurs, according to Tucker.
"The law requires merchants to leave all but the last five digits of a credit card number off store receipts," she explained. "This will ensure that receipts, which consumers often discard, do not contain their credit card numbers – a key to their financial identity."
The Fair and Accurate Transactions Act also creates a national system of fraud detection to make identity thieves more likely to be caught.
"Victims previously would have to make phone calls to all of their credit card companies and the three major credit reporting agencies to alert them of the crime," the LSU AgCenter family economist said. "Now consumers will need to make only one call to receive advice, set off a nationwide ‘fraud alert’ and protect their credit standing."
That nationwide system of fraud alerts for consumers to place on their credit files is another of the new aspects provided by this latest credit act.
"Credit reporting agencies that receive such alerts from consumers will now be obliged to follow procedures to ensure that any future requests are by the true customer, not an identity thief posing as the consumer," Tucker explained, adding, "The law also will enable active-duty military personnel to place special alerts on their files when they are deployed overseas."
Because of these provisions, lenders and credit agencies will be required to take action before a victim may even know that an identity theft has occurred, Tucker stressed.
"Credit agencies, with oversight by bank regulators, will establish a set of guidelines to identify patterns or ‘red flags’ common to identity theft," the family economist explained. "Then they will develop methods to stop identity theft before it can cause major damage, and financial institutions that disregard the ‘red flags’ will be fined if their disregard of those signs results in losses to consumers."
New regulations also allow consumers to block information from being given to a credit bureau and from being reported by a credit bureau if such information results in identity theft, Tucker said.
"The provisions authorized by the Fair and Accurate Credit Transactions Act can be a tremendous benefit to Americans of every income level and background as they strive to build good credit and confront the problem of identity theft," Tucker said.
For more general information on family finances or a broad range of issues including nutrition and health, money and business, lawns and gardens, natural resources and the environment and much more, visit www.lsuagcenter.com or your parish LSU AgCenter Extension Office.