Creditors include finance companies, automobile dealers, mortgage brokers, utility companies, and telecommunications companies. Accepting credit cards as a form of payment does not in and of itself make an entity a creditor. Financial institutions under the Federal Trade Commission's jurisdiction include state-chartered credit unions and certain other entities that hold consumer transaction accounts.Ī creditor is any entity that regularly extends, renews, or continues credit any entity that regularly arranges for the extension, renewal, or continuation of credit or any assignee of an original creditor who is involved in the decision to extend, renew, or continue credit. Most of these institutions are regulated by the Federal bank regulatory agencies and the NCUA. Transaction accounts include checking accounts, negotiable order of withdrawal accounts, savings deposits subject to automatic transfers, and share draft accounts. A transaction account is a deposit or other account from which the owner makes payments or transfers. These rules apply to "financial institutions" and "creditors" with "covered accounts." A financial institution is defined as a state or national bank, a state or federal savings and loan association, a mutual savings bank, a state or federal credit union, or any other entity that holds a "transaction account" belonging to a consumer. ? Notices from customers, victims of identity theft, law enforcement authorities, or other businesses about possible identity theft in connection with covered accounts ? Unusual use of ? or suspicious activity related to ? a covered account ? Suspicious personally identifying information, such as a suspicious address ? Alerts, notification, or warnings from a consumer reporting agency Red Flags generally fall into one of five categories: Red Flag means a pattern, practice, or specific activity that indicates the possible existence of identity theft. The program must include reasonable policies and procedures for detecting, preventing, and mitigating identity theft.Īnother regulation requires users of consumer reports to respond to Notices of Address Discrepancies that they receive and a third regulation places special requirements on issuers of debit or credit cards to assess the validity of a change of address if they receive notification of a change of address for a consumer's debit or credit card account, and within a short period of time afterward they receive a request for an additional or replacement card for the same account. The first requires financial institutions or creditors to develop and implement an Identity Theft Prevention Program in connection with new and existing accounts. For example, financial institutions face a mandatory deadline of Novemto comply with three FACTA regulations referred to as the Red Flag Rules. There are also provisions in the act to help reduce identity theft, such as the ability for individuals to place alerts on their credit histories if identity theft is suspected.įACTA also placed requirements on certain businesses. The act allows consumers to request and obtain a free credit report once every twelve months from each of the three nationwide consumer credit reporting agencies. The Fair and Accurate Credit Transactions Act of 2003 (FACTA) is a federal law passed by Congress as an amendment to the Fair Credit Reporting Act. « Back Fair and Accurate Credit Transactions Act- Red Flag RulesĬhanges to the Fair Credit Reporting Act by passage of the Fair and Accurate Credit Transactions Act (FACTA) place certain requirements on financial institutions and creditors, effective November 1, 2008.
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