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FTC RIN: 3084-AA94 Publication ID: Spring 2010 
Title: Fair and Accurate Credit Transactions Act of 2003 
Abstract: The Fair and Accurate Credit Transactions Act of 2003 (the FACT Act or FACTA or the Act) was enacted on December 4, 2003. The Act requires that the Commission undertake a number of rulemakings and studies. EFFECTIVE DATES The FACT Act required that the FTC, together with the Board of Governors of the Federal Reserve System (the Federal Reserve), jointly adopt the effective dates of portions of the statute where the effective dates are not prescribed within 2 months of enactment of the Act. On December 24, 2003, the Federal Reserve and the FTC jointly adopted Interim Final Rules that established December 31, 2003, as the effective date for provisions of the Act that determine the relationship between the Fair Credit Reporting Act and State laws and provisions that authorize rulemakings or other implementing actions by agencies (68 FR 74467). On December 24, 2003, the Federal Reserve and FTC also issued a notice of proposed rulemaking (NPRM) requesting comments and specifying the effective dates for the other provisions of the FACT Act for which the statute does not specify an effective date (68 FR 74529). On February 11, 2004, the Commission and the Federal Reserve published joint final rules that established a schedule of effective dates for many of the provisions of the FACT Act for which the Act itself did not specifically provide an effective date. The Agencies also made final what had previously been interim; namely, establishing December 31, 2003, as the effective date for provisions of the Act that determine the relationship between the Fair Credit Reporting Act and State laws and provisions that authorize rulemakings or other implementing actions by agencies. 69 FR 6526. CREDIT REPORTS AND RELATED ISSUES The FACT Act requires that the Commission adopt rules concerning credit reports and credit scores and related issues. Most of the proceedings are to be conducted jointly with the Federal Reserve, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, Office of Thrift Supervision (the banking agencies), and the National Credit Union Administration (NCUA). The rulemaking mandates are detailed below. Circumvention With respect to Credit Reports, the Act requires that the Commission issue rules by March 3, 2004, on preventing corporate and technological circumvention of the obligations imposed on nationwide consumer reporting agencies. On February 24, 2004, the FTC published an interim final rule prohibiting consumer reporting agencies from avoiding treatment as nationwide consumer reporting agencies and requested comments on this measure. 69 FR 8532. The interim final rule became effective on March 3, 2004. Free Credit Reports The FACT Act required that the Commission issue rules concerning: (1) A centralized source for free consumer reports by nationwide consumer reporting agencies and nationwide specialty consumer reporting agencies; (2) the provision of free credit reports by nationwide consumer reporting agencies and nationwide specialty consumer reporting agencies; and (3) a streamlined process for consumers to obtain free credit reports from specialized bureaus. On March 19, 2004, the Commission requested comments on a proposed rule that would establish a centralized source, a standardized form, and a streamlined process through which consumers may request a free annual file disclosure from each nationwide specialty consumer reporting agency. 69 FR 13192. On June 24, 2004, the Commission published a final rule effective on December 1, 2004, for the provision of free reports to consumers, including: (1) A central source whereby consumers can make one request and receive their consumer report from each of the three major nationwide consumer reporting agencies and (2) rules with respect to the provision of free consumer reports by "nationwide specialty consumer reporting agencies," as defined in new FCRA section 603(w). 69 FR 35468. Section 205 of the Credit Card Accountability Responsibility and Disclosure Act of 2009 requires the Commission to issue a rule to prevent deceptive marketing of "free credit reports." On October 7, 2009, the Commission issued an NPRM to amend its Free Credit Reports rule to require prominent disclosures in advertising for "free credit reports" and to address practices that interfere with consumers' ability to obtain file disclosures from consumer reporting agencies. 74 FR 52915. The comment period ended on December 7, 2009. On February 22, 2010, the Commission issued a final rule. The effective date of the Rule provisions shall be April 2, 2010, except for the wording of the disclosures for television and radio advertisements in sections 610.4(b)(1)(i) and (2) for which the effective date shall be September 1, 2010. Use of Consumer Information by Affiliates for Marketing Purposes The Commission, along with the banking agencies, the NCUA, and the Securities and Exchange Commission (SEC), is required to issue rules to implement the Act's provisions allowing consumers to opt out of marketing by affiliates. The Commission issued an NPRM on June 15, 2004. 69 FR 33324. The extended comment period closed on August 16, 2004. The agencies reviewed the comments and published a final rule on October 30, 2007. 72 FR 61424. The agencies made technical revisions to the rule on May 14, 2009. 74 FR 22639. Enhancement of Opt Out Notice (Prescreen Rule) The Commission, in consultation with the banking agencies and the NCUA, was also required to issue rules concerning the enhancement of notices to consumers about their right to opt out of prescreened solicitations. FACTA calls for these notices to be presented in a format and in a type, size, and manner that is simple and easy to understand. The Commission published an NPRM on October 1, 2004, 69 FR 58861, and subsequently published the final rule on January 31, 2005. 70 FR 5022. The prescreen rule was effective on August 1, 2005. Disposal of Credit Report Information By December 4, 2004, the Commission was required, in coordination with the banking agencies, NCUA, and the SEC, to issue rules concerning the proper disposal of credit report information and records. On April 20, 2004, the Commission published an NPRM and Request for Comments (69 FR 21388). The Commission and the other agencies published a Final Disposal Rule on November 24, 2004. 69 FR 68690. The Disposal Rule was effective on June 1, 2005. Credit Bureau Charge for Credit Scores The Commission is authorized to determine a fair and reasonable fee that consumer reporting agencies may charge for disclosure of credit scores. On November 8, 2004, the Commission issued an ANPRM seeking comments on rules effecting fair and reasonable fees for credit scores. 69 FR 64698. The comment period closed on January 5, 2005. Staff reviewed the comments and is monitoring the credit score market, where prices have continued to remain reasonable and competitive. Furnisher Rules The Commission is required, in coordination with the banking agencies and NCUA, to issue guidelines and rules concerning the accuracy of information furnished to consumer reporting agencies, and rules relating to the ability of consumers to dispute information directly with furnishers of information. The Commission and the other agencies issued an ANPRM for public comment on March 22, 2006, 71 FR 14419, and an NPRM on December 10, 2007. 72 FR 69279. The comment period closed on February 11, 2008. The agencies published final rules on July 1, 2009. 74 FR 31484. The rules will be effective on July 1, 2010. On July 1, 2009, the agencies also issued an ANPRM seeking comments on whether to propose an addition to one of the guides that would delineate circumstances under which a furnisher would be expected to provide an account opening date, or any other types of information, to a consumer reporting agency to promote the integrity of the information. The comment period closed on August 31, 2009; and the agencies are reviewing the comments. 74 FR 31529. The agencies hope to take further action by the end of the summer 2010. Other Required and Discretionary Actions on Credit Reports and Related Issues With respect to credit reports and related issues, the Act requires the Commission jointly with the Federal Reserve to issue rules addressing the form, content, time, manner, definitions, exceptions, and model of the risk-based pricing notice. The agencies published a risk-based pricing proposal for public comment on May 19, 2008. 73 FR 28966. The comment period closed on August 18, 2008. The agencies issued final rules on January 15, 2010. 75 FR 2724. The Commission's regulations and guidelines will become effective January 1, 2011. IDENTITY THEFT The FACT Act requires that the Commission adopt rules concerning identity theft and related issues. Some of the proceedings are to be conducted jointly (or in consultation) with the banking agencies and the NCUA. The rulemaking mandates are detailed below. Summary of Rights The Act requires the Commission to promulgate a summary of consumers’ identity theft rights and to mount a public education campaign regarding consumers’ new identity theft rights. The Commission issued the proposed summary of consumers' identity theft rights on July 16, 2004. 69 FR 42616. The Commission issued the final model summary on November 30, 2004. 69 FR 69776. Definitions FACTA requires the Commission to define certain terms that are relevant to consumers’ new identity theft rights ("Identity Theft Definitions Rule") and to promulgate in a rule the length of time for active duty/military alerts. On April 28, 2004, the Commission published an NPRM proposing rules that would establish definitions for "identity theft" and "identity theft report"; the duration of an "active duty alert"; and the "appropriate proof of identity" for purposes of sections 605A (fraud alerts and active duty alerts), 605B (consumer report information blocks), and 609(a)(1) (truncation of Social Security numbers) of the FCRA, as amended by the FACT Act. 69 FR 23370. The Commission published an Identity Theft Definitions Rule on November 3, 2004. 69 FR 63922. Model Forms and Procedures FACTA also requires the Commission in consultation with the banking agencies and the NCUA to develop a model form and procedures to be used by identity theft victims for contacting and informing creditors and consumer reporting agencies of the fraud. On April 27, 2005, the Commission issued notice of its publication of guidance containing such model forms and procedures. 70 FR 21792. This guidance, "Take Charge: Fighting Back Against Identity Theft," is available at www.ftc.gov/bcp/edu/microsites/idtheft or by writing to FTC, Consumer Response Center, Room 130-B, 600 Pennsylvania Avenue NW, Washington, DC 20580. Red Flags The Commission is also required to jointly promulgate with the banking agencies and the NCUA identity theft "red flag" guidelines and rules to implement these guidelines (the "ID theft red flag rule") and an address change rule (the "address change rule"). The ID theft red flag rule would, among other things, require card issuers to investigate requests for card changes. The address change rule would require credit report users to investigate when the address on a credit report differs from the address on a credit application. The agencies jointly published proposed rules on July 18, 2006. 71 FR 40786. The comment period closed on September 18, 2006. The agencies reviewed the comments and issued a final rule on November 9, 2007. 72 FR 63718. The rule became effective on November 1, 2008. At the request of members of Congress, the Commission has delayed enforcement of the Red Flags portion of the rule until June 1, 2010, for entities subject to enforcement by the Commission. This delay in enforcement is limited to the Red Flags Rule and does not extend to the rule regarding address discrepancies applicable to users of consumer reports (16 CFR 641), or to the rule regarding changes of address applicable to card issuers (16 CFR 681.2). The FTC has launched a website at http://www.ftc.gov/redflagsrule, which includes "Fighting Fraud with the Red Flags Rule: A How-To Guide for Business," to help entities covered by the Red Flags Rule design and implement identity theft prevention programs. The rule requires "creditors" and "financial institutions" to develop written programs to identify the warning signs of ID theft, spot them when they occur, and take appropriate steps to respond to those warning "red flags." The FTC developed a compliance template (at www.ftc.gov/bcp/edu/microsites/redflagsrule/RedFlags_forLowRiskBusinesses.pdf) to help businesses and organizations at low risk to identity theft design their own identity theft prevention program. MISCELLANEOUS On May 20, 2004, the Commission issued a final rule effective on June 21, 2004, making technical changes to earlier rules, establishing a general organizational scheme for subchapter F of chapter I of title 16 of the Code of Federal Regulations, and setting forth general provisions applicable to all FTC rules under the FCRA. 69 FR 29061. 
Agency: Federal Trade Commission(FTC)  Priority: Substantive, Nonsignificant 
RIN Status: Previously published in the Unified Agenda Agenda Stage of Rulemaking: Final Rule Stage 
Major: Yes  Unfunded Mandates: No 
CFR Citation: 16 CFR 602 to 604    16 CFR 610 and 611    16 CFR 613 and 614    16 CFR 641 and 642    16 CFR 660    16 CFR 680 to 682    16 CFR 698   
Legal Authority: PL 108-159, 117 Stat 1952    PL 11-24, 123 Stat 1734   
Legal Deadline:
Action Source Description Date
Final  Statutory  Rules for Advertising Disclosures in Marketing Free Credit Reports  02/22/2010 
Final  Statutory  Rules Allowing Consumers To Opt Out of Marketing by Affiliates  09/04/2004 
Final  Statutory  Rules Concerning Free Consumer Credit Reports  06/03/2004 
Final  Statutory  Rules Prohibiting Consumer Reporting Agencies From Circumventing FACTA Provisions  03/03/2004 
Final  Statutory  Rules Specifying Effective Dates of FACTA Provisions Where Statute Does Not Specify Dates  02/11/2004 
Final  Statutory  Effective Date for FACTA Provisions Affecting FCRA and State Laws  12/31/2003 
Timetable:
Action Date FR Cite
Joint Interim Final Rules (Effective Date FACT Act Provisions)  12/24/2003  68 FR 74467   
NPRM (Effective Date FACT Act Provisions)  12/24/2003  68 FR 74529   
Joint Final Rules (Effective Date FACT Act Provisions)  02/11/2004  69 FR 6526   
Interim Final Rule/Request for Comments (Prohibition Against Circumvention)  02/24/2004  69 FR 8532   
NPRM/Request for Comments (Free Annual Credit File Disclosures)  03/19/2004  69 FR 13192   
Final Rule (Free Annual Credit File Disclosures)  06/24/2004  69 FR 35468   
NPRM - Request for Comments (Affiliate Marketing)  06/15/2004  69 FR 33324   
Comment Period Extended (Affiliate Marketing)  07/21/2004  69 FR 43546   
NPRM (Prescreen Opt Out Disclosure)  10/28/2004  69 FR 58861   
Final Rule (Prescreen Opt Out Disclosure)  01/31/2005  70 FR 5022   
NPRM - Request for Comments (Disposal of Consumer Report Information)  04/20/2004  69 FR 21388   
Final Rule (Disposal of Consumer Report Information)  11/24/2004  69 FR 68690   
Effective Date for Disposal Rule  05/01/2005    
ANPRM (Credit Score Fees)  11/08/2004  69 FR 64698   
Comment Period Ended (Credit Score Fees)  01/05/2005    
Proposed Summaries and Notices (Model Disclosures for Identity Theft Rights)  07/16/2004  69 FR 42616   
Final Action (Model Disclosures for Identity Theft Rights)  11/30/2004  69 FR 69776   
Effective Date (Model Disclosures for Identity Theft Rights)  01/31/2005    
Notice of Publication (Guidance for Identity Theft Victims)  04/27/2005  70 FR 21792   
NPRM (Identity Theft Definitions Rule)  04/28/2004  69 FR 23370   
Final Rule (Identity Theft Definitions Rule)  11/03/2004  69 FR 63922   
Effective Date (Identity Theft Definitions Rule)  12/01/2004    
Final Rule (Miscellaneous Technical Amendments)  05/20/2004  69 FR 29061   
ANPRM (Furnisher Accuracy and Dispute Rules)  03/22/2006  71 FR 14419   
ANPRM Comment Period End (Furnisher Rules)  05/22/2006    
NPRM (Identity Theft Red Flags and Address Changes Rules)  07/18/2006  71 FR 40786   
NPRM Comment Period End (Red Flags and Address Changes Rules)  09/18/2006    
Final Rule (Affiliate Marketing)  10/30/2007  72 FR 61424   
Final Rule (Red Flags and Address Changes)  11/09/2007  72 FR 63718   
Technical Changes (Red Flags and Address Changes)  05/14/2009  74 FR 22639   
NPRM (Furnisher Rules)  12/13/2007  72 FR 70944   
NPRM (Risk Based Pricing Rule)  05/19/2008  73 FR 28966   
Final Rule (Furnisher Rules)  07/01/2009  74 FR 31484   
ANPRM (Furnisher Rule)  07/01/2009  74 FR 31529   
ANPRM Comment Period End (Furnisher Rule)  08/31/2009    
NPRM (Free Annual Credit File Disclosure; Deceptive Marketing)  10/15/2009  74 FR 52915   
NPRM Comment Period End (Free Annual Credit File Disclosure; Deceptive Marketing)  11/30/2009    
NPRM Comment Period Extended (Free Annual Credit File Disclosure; Deceptive Marketiing)  11/27/2009  74 FR 62260   
Final Rule (Risk Based Pricing)  01/15/2010  75 FR 2724   
Final Rule (Free Annual Credit File Disclosure; Deceptive Marketing)  03/03/2010  75 FR 9726   
Effective Date (Free Annual Credit File Disclosure; Deceptive Marketing)  04/02/2010    
Next Action (Furnisher Rule)  10/00/2010    
Regulatory Flexibility Analysis Required: Undetermined  Government Levels Affected: Federal, Local, State, Tribal 
Small Entities Affected: Businesses  Federalism: No 
Included in the Regulatory Plan: No 
RIN Data Printed in the FR: No 
Agency Contact:
Clarke W. Brinckerhoff
Attorney
Federal Trade Commission
Bureau of Consumer Protection, 600 Pennsylvania Avenue NW,
Washington, DC 20580
Phone:202 326-3208
Email: cbrinckerhoff@ftc.gov