FACTA

FACTA, the Fair and Accurate Credit Transactions Act of 2003 was enacted to:

  • To prevent identity theft
  • Improve resolution of consumer disputes
  • Improve the accuracy of consumer records
  • Make improvements in the use of, and consumer access to, credit information

FACTA is an amendment of the Fair Credit Reporting Act (FCRA). Effective June 1, 2005, a new federal rule will require businesses and individuals to take appropriate measures to dispose of sensitive information derived from consumer reports.[2][3] The Rule requires disposal practices that are reasonable and appropriate to prevent the unauthorized access to – or use of – information in a consumer report.  For example:

  • Reasonable measures for disposing of consumer report information could include establishing and complying with policies to: burn, pulverize, or shred papers containing consumer report information so that the information cannot be read or reconstructed
  • Destroy or erase electronic files or media containing consumer report information so that the information cannot be read or reconstructed
  • Or conduct due diligence and hire a document destruction contractor to dispose of material specifically identified as consumer report information consistent with the rule

Violations of FACTA If you are found non-compliant, you could be vulnerable to severe fines and even subject to class-action lawsuits, including:

  • Civil Liability — A) Actual damages sustained if identity is stolen as a result of corporate inaction; B) Statutory damages up to $1,000 per employee.
  • Class-Action Lawsuits — If large numbers of employees are affected, they may be able to bring class-action suits and get punitive damages from employers.
  • Federal Fines — Up to $2,500 for each violation.
  • State Fines — Up to $1,000 for each violation.