Fair and Accurate Credit Transaction Act (FACTA)
IThe Fair and Accurate Credit Transactions Act of 2003 is a United States federal law, passed by the United States Congress on November 22, 2003, and signed by President George W. Bush on December 4, 2003, as an amendment to the Fair Credit Reporting Act. The act allows consumers to request and obtain a free credit report once every 12 months from each of the three nationwide consumer credit reporting companies. In cooperation with the Federal Trade Commission, the three major credit reporting agencies set up the web site AnnualCreditReport.com to provide free access to annual credit reports.
Proper Disposal of Sensitive Information
Lastly, FACTA requires creditors and financial institutions to take “reasonable measures to protect against unauthorized access to or use of consumer information” by means of proper disposal.
To ensure private information is not compromised it required that reasonable steps be taken to destroy private information beyond a doubt before it leaves the hands of any financial institution.
What Are the Consequences of Failing to Comply With FACTA?
If you fail to comply with FACTA regulations and become a victim of a data breach leading to identity theft cases for your customers, you can expect to face class action lawsuits that will be financially crippling.
Individuals who experience identity theft because of the failure of a financial institution to implement and abide by FACTA regulations can seek damages under the law. FACTA states that failure to comply can lead to fines of up to $1,000 per individual violation, even if the consumer did not suffer damages from identity theft.