Lets face it, every now and then we have all given in to our love of a bargain and signed up for that department store credit card to get the extra 20 percent off of that big purchase. It’s easy to never look back over the sea of plastic cards accumulating in the bottom of your purse. However, benign neglect of your accumulated available credit may have unforeseen financial consequences that far outweighs that one-time savings. You may be exposing yourself to increased risk of identity theft that may take years to resolve.
Fortunately, many states, in conjunction with the federal government, have enacted laws that provide real relief to victims of this crime. The Fair and Accurate Credit Transactions Act (FACTA) allows victims to contact any one of the three major credit reporting agencies (such as TransUnion) to flag their accounts with a “fraud alert.” This alert is effective only for the first 90 days but can be extended up to seven years. FACTA also allows active military personnel to similarly report any tour of duty outside the country for a period of 12 months. This places the burden on any provider of credit to take reasonable steps to ensure that applications for credit were not made under false pretenses.
As an additional provision of FACTA, businesses who utilize credit cards for the purchase of their merchandise must undertake certain practices to ensure that card information is not available through the processing of a transaction. In other words, businesses cannot generate receipts with complete credit card information available to potential thieves. There are a few exceptions to this general provision.
Victims of identity theft have additional authority under FACTA to obtain the details of any fraudulent account created in their name. This federal act allows victims to request the applications, detailed transaction reports and the illegal activities of thieves from businesses which extended credit.
In addition, reporting agencies have an affirmative duty to provide victims with notice of their legal rights under the Act, which is in addition to those rights defined under the Fair Credit and Reporting Act. A critical component of FACTA is the ability of a consumer to dispute inaccurate claims and to prevent the dissemination of negative credit information during the investigation period. In addition, Illinois has enacted similar legislation to complement existing federal laws that protect consumers. The Illinois Fair Debt Collections Practices Act allows consumers to place a freeze on their credit report and prevents thieves from opening new credit under false identities. The Illinois Act also creates a dispute procedure placing the burden on creditors to investigate and validate debt which is the subject of alleged identity theft. Upon notice by consumers to place freezes on their credit reports, the credit-reporting agency shall send a confidential PIN or password to the consumers which will limit access to their credit reports. Existing creditors may still request credit information, but future credit cannot be extended without permission by individual consumers.
The modern-day consumer needs to be proactive. The best action is to monitor your credit report regularly and avoid unnecessary applications for credit. For more information, you can refer to numerous websites such as the National Consumer Law Center at www.nclc.org, the Identity Theft Resource Center at www.idtheftcenter.org and the Illinois Office of the Attorney General at www.ag.state.il.us. TPW
