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FACTA: Fair and Accurate Transactions Act

Posted by Clarissa Gotsch on Apr 10, 2018

FACTA: Fair and Accurate Transactions Act

Call center compliance is as important to success as headsets and a dialer. Non-adherence and non-compliance to any local and national legislation can have serious ramifications that can add up to hefty fines. So when it comes to compliance, knowledge is necessary.

Here we begin a series discussing various legislations and policies that we adhere to so our call center not only protects information but insures our success, starting with FACTA.

What is FACTA?

FACTA, or the Fair and Accurate Credit Transactions Act of 2003, is an amendment to the original 1970 Fair Credit Reporting Act (FCRA). It was established to help safeguard consumers from the danger of identity theft, and establishes rules on how consumer information can be used or shared. These guidelines also include the “Red Flag Rules,” which delegate theft prevention programs. 

What about FCRA?

The FCRA (Fair Credit Reporting Act) of 1970 is one of the first examples of a data protection law to be passed. It is a piece of legislation that was enacted in order to protect consumer information, and to keep credit reports accurately updated. 

FCRA dictates that reporting agencies must:

• Disclose your credit file on your request

• Limit access to your information 

• Get your consent before providing credit information to an employer

• Investigate any disputed information

• Correct or delete any inaccurate information on the credit report 

• Delete any outdated information

• Add identity theft and active duty alerts

• Remedy the effects of identity theft 


2007 FACTA Red Rules

An addition to FACTA in 2007, known as “Red Rules”, dictates that both financial establishments and their creditors create an Identity Theft Protection Program. These theft protection programs are meant to find, and impede identity theft, and should be set up to reflect the size and complexness of each individual institution. 

Red Flags & Appropriate Responses 

Red flags are any cause of alarm or warning signs regarding a person or persons credit report or personal information, that should immediately be responded to. These red flags include:

• Any suspicious documents, personal identifying information, suspicious accounts or any other related activity

• Alerts from customers, law enforcement or other persons

• Warnings from consumer reporting 

Once red flags are detected, one or more responses, appropriate to the threat, should be followed up. This response could be as simple as notifying law enforcement, changing passwords, or contacting the customer. 

FACTA Violation Penalties

FACTA violations can lead to civil liabilities, class actions, federal or state enforcement. Monetary penalty amounts can vary, depending on the violation and actual damages incurred. 

• Civil Penalties can be up to $1000 per customer for statutory damages.  If the violation is brought into a class action, the statutory damages can easily range into the millions. 

• Federal enforcement can charge penalties of up to $2500 for each independent violation.

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Topics: compliance

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