What is the difference between FCRA and FACTA?
Fair Credit Reporting Act (“FCRA”):
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Regulates the consumer credit reporting industry, requiring fair, timely, and accurate reporting of consumer credit information.
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Banks and lenders use this information to make lending decisions.
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Established consumer rights, such as access to credit reports and dispute resolution processes.
Fair and Accurate Credit Transactions Act (“FACTA”):
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An amendment to FCRA, strengthening consumer protections against identity theft, inaccurate credit reporting, and fraudulent credit activities.
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Requires financial institutions and creditors to develop and implement written identity theft prevention programs.
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Enhances consumer access to credit information, including the right to one free credit report every 12 months from each of the three major credit bureaus.
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Introduces requirements for credit score disclosure, including the score range and a “fair and reasonable fee” for consumers.
Key differences:
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FCRA focuses on the accuracy and fairness of credit reporting, while FACTA expands to address identity theft and fraudulent activities.
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FCRA sets standards for credit report creation, whereas FACTA emphasizes prevention and mitigation of identity theft.
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FACTA introduces new consumer rights, such as free annual credit reports and credit score disclosure, which were not part of the original FCRA.
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