According to the Federal Trade Commission, some 27.3 million Americans were victims of identity theft in the last five years, including 9.9 million people in 2002, at a cost to businesses and consumers of more than $55 billion. Clearing up the damage done by identity thieves can take months of frustrating calls to credit bureaus and merchants. Now there is a new law in place - The Fair and Accurate Credit Transaction Act of 2003 – that is expected to give some added protection against identity theft and ensure that all citizens are treated fairly when they apply for a mortgage or other form of credit.
The law provides consumers, companies, regulators and credit reporting agencies with new tools that expand access to credit and other financial services, enhance the accuracy of consumers’ financial information, and are expected to help fight identity theft. The new legislation will:
- Give consumers the right to obtain their credit report free of charge every year. Consumers will be able to review a free report every year for unauthorized activity, including activity that might be the result of identity theft.
- Guarantee access to the credit score used to evaluate and price loans and mortgage applications.
- Require merchants to leave all but the last five digits of a credit card number off store receipts, to help prevent identity theft. This law will make sure that slips of paper that most people trash does not contain their credit card number, a key to their financial identities.
- Create a national system of fraud detection to make identity thieves more likely to be caught. Previously, victims would have to make phone calls to all of their credit card companies and three major credit-reporting agencies (Equixfax, Experian and Trans Union) to alert them to the crime. Now consumers will have the power to place fraud alerts on their credit files if they suspect that fraud has occurred. Those alerts, in turn, will instruct banks and other creditors not to open new accounts or extend additional credit to anyone without contacting the consumer first.
- Require lenders and credit agencies to take action before a victim even knows a crime has occurred. With oversight by bank regulators, the credit agencies will draw up a set of guidelines to identify patterns common to identity theft, and develop methods to stop identity theft before it can cause major damage.
- Give consumers the option, with some exceptions, to opt out of receiving marketing calls or mail from companies they do business with.
For more information on the Fair and Accurate Transaction Act of 2003, go to http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_cong_bills&docid=f:h2622enr.txt.pdf.