August 29, 2008, Newsletter Issue #67: FACTA Law Guarantees Free Annual Credit Reports

Tip of the Week

Just about everything you read about preventing identity theft and fraud tells you that the first line of defense is to review your credit report on a regular basis. And the Fair and Accurate Credit Transactions Act (FACTA) makes that easy by requiring agencies to provide you with your reports once each year at no charge. All you have to do is ask.



The three free reports covered by FACTA are in addition to the free reports you can order when you discover you have been a victim of identity theft and place fraud alerts on your credit reports. Once you receive the free reports you are entitled to from the fraud alert process, follow up a few months later to take advantage of your free FACTA copy.



In 2005, an additional federal Disposal Rule became part of FACTA, requiring businesses and individuals to properly dispose of information in consumer reports and records. This rule was added to protect against “unauthorized access to or use of the information.”



The method of proper disposal of consumer report information is left up to the organizations and individuals who must comply with the rule.



The rule, according to the Federal Trade Commission, applies to any person or organization that uses consumer reports. This includes insurers, employers, landlords, car dealers, debt collectors, mortgage lenders and brokers, government agencies, and any other individual who pulls consumer reports on prospective home workers, such as contractors, cleaning personnel and nannies. The rule also applies to any entity that maintains consumer report information as a service provider to other organizations covered by the rule.

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