In 2003, the US Congress passed the Fair and Accurate Credit Transactions Act. This article looks at your legal rights under the FACT Act.
There are three main regulations in the FACT Act.
First, financial institutions are required to develop and implement Identity Theft prevention pro
grams for both new and existing accounts. The identity theft programs must have policies and procedures to detect, prevent, and mitigate identity theft.
Second, any creditor who receives a discrepancy notice from a consumer (through the credit bureau) must respond to the charge within 30 days. Otherwise, the mark must be eliminated from the user's credit report.
That means that if you go through your credit report and make a list of the bad marks and forward that list to the credit bureaus, the creditors must provide proof that the black mark was valid or – poof – it disappears from your credit report.
Finally, the creditor must assess whether a change of address notice is valid before forwarding any mail.
Under this law, you also have the right to be informed whenever your credit report plays any part of a decision involving you. For instance, if you were turned down for an apartment, the apartment must dislose to you if they ran your credit. Similarly, if you apply for a job and do not get it, they have to notify you if they ran your credit.
Knowing what your legal rights are under the FACT Act is your first line of defense when it comes to credit repair.