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   ARTICLE   |   From Scotsman Guide Residential Edition   |   April 2004

The Rutledge Report

The new Fair and Accurate Credit Transactions Act of 2003 (FACTA) amends the current Fair Credit Reporting Act (FCRA) to "prevent identity theft, improve resolutions of consumer disputes, improve accuracy of consumer records, make improvements in the use of and consumer access to credit information”, beginning Jan/04.

Among the new FACTA provisions are a free annual copy of credit reports upon request from each of the big three credit reporting agencies (CRAs), disclosure of credit scores used by lenders when making lending decisions, and several identity theft measures, including” fraud alerts” in credit files.

Further, when requesting free credit reports, the law includes a provision whereby the CRAs must notify consumers of their right to get their credit scores and also includes an explanation of factors that may have a negative effect on their score. Now consumers may dispute directly to the creditor and the CRA; plus creditors must notify a consumer whenever negative information is going to be sent to a CRA for inclusion in a credit file, reducing the number of inaccurate reports going into files. The consumer will know in advance and may dispute it directly before it hits his/her credit file.

Further, to help consumers who are actively shopping for a mortgage, automobile or other type of loan avoid having many inquiries on their credit reports as a result, CRA will send them a special notification indicating that these inquiries are lowering their credit scores. Here is a summary of the major amendments:                                                                                                          

  • Provide consumers with a free credit report every year.
  • Give consumers the right to see their credit scores.
  • Provide consumers with the ability to opt-out of information sharing between affiliated companies for marketing purposes. 
  • Ensure that consumers are notified if merchants are going to report negative information to the credit bureaus about them. 
  • Allow consumers to place "fraud alerts" in their credit reports to prevent identity thieves from opening accounts in their names. 
  • Allow consumers to block information from being given to and reported by a credit bureau if such information results from identity theft.
  • Restrict access to consumers' sensitive health information. 
  • Provide consumers with one-call-for-all protection by requiring credit bureaus to share consumer calls on identity theft and disputed accounts.
  • Require creditors to take certain precautions before extending credit to those who have placed "fraud alerts" in their files.                                                               
  • Stop merchants from printing more than the last five digits of a payment card on an electronic receipt. 


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