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Fair and Accurate Credit Act; FACTA becomes law
The Fair and Accurate Credit Transactions Act, signed into law on Dec. 4, 2003, gives every American the right to a free credit report every year from each of the three major credit bureaus -- Equifax, Experian and TransUnion. But most major provisions in the sprawling new law, which carves national credit reporting standards into stone and beefs up consumer protections against identity theft, won't take effect for a year.

And that includes those much sought-after freebie credit reports. Under the law, the Federal Trade Commission has six months to write the regulations for distributing free credit reports and credit bureaus have another six months to comply with the new rules. If all goes well, by this time next year you'll be able to add a free credit report to your holiday wish list.

Until then, unless you live in the handful of states that offer free credit reports, you'll need to pay as much as $9 to take a gander at your credit record. There's a lot more to the Fair and Accurate Credit Transactions Act than free credit reports. Regulators have proposed an effective date of Dec. 1, 2004 for several sections of the new law. The actual effective dates for these sections must be finalized by Feb. 4, 2004.

Here's a quick summary of other key provisions and consumer protections in the new law.

Uniform credit standards
In 1996, Congress set uniform national standards on credit reporting. These standards set clear rules on what credit agencies could include in consumer credit reports. This new law makes these standards permanent Dec. 31.

Safeguarding receipts
To help ward off identity theft, retailers must hide credit card and debit card information on customer receipts. Only the last five digits of a card number will be listed. As of Jan. 1, 2005, all new cash registers and point-of-sale terminals must print these safeguarded receipts. Merchants have until Dec. 4, 2006 to phase out any existing registers or terminals that print full account numbers on receipts.

New opt-out rules
Consumers will have the right to "opt-out" and block solicitations from affiliates of companies that they do business with. These new opt-out rules won't take effect until late 2004 or early 2005.

Disclosing bad credit news
Thanks to the new law, a bank will have to tell you if it reports any negative information about you to the credit bureaus. A bank will also have to tell you if it grants you credit at less favorable terms than those received by most other consumers. These provisions are scheduled to kick in on Dec. 1, 2004.

Reporting of false credit news
Any debt collector that learns that information on a consumer's credit report is fraudulent must inform the creditor that the information is false. No retailer or creditor may report credit information to credit bureaus that is known or believed to stem from fraud. These provisions are scheduled to begin in December 2004.

More power for identity theft victims
Identity theft victims that file police reports will be able to block fraudulent information from appearing on their credit reports. And fraud victims will also get more help from businesses in tracking down impostors. Under the new law, an identity theft victim will be able to obtain copies of business records that list fraudulent transactions carried out by an identity thief. Pumped-up powers for identity theft victims are scheduled to arrive on Dec. 1, 2004.

Beefed-up fraud alerts
A fraud alert is a statement that's placed on your credit report to alert creditors that your private financial information has been or may be compromised. Identity theft victims put fraud alerts on their credit files after they learn impostors are ringing up charges in their names.

Under the new law, once a credit bureau receives a fraud alert, it must take steps to ensure that the consumer and not the thief will be granted credit in the future. This extra step could be something as simple as calling the phone number listed in a consumer fraud alert whenever a new application for credit pops up. Muscled-up fraud alerts are scheduled to hit the scene in December 2004.

Special alerts for the military
Americans in the armed forces will be able to place special alerts in their credit files while they are serving overseas to help minimize their chances of becoming victims of identity theft. These alerts are scheduled to begin in December 2004.

Preemption of State laws
Certain sections of the new FACT act will allow federal coverage rather than all the individual state laws that often confuse credit issues. While this may help in many areas it may lower a consumers protection especially if their state offered more protection for identity theft. More to come on this issue in 2004.

The main purposes of the FACT Act are:

To amend the Fair Credit Reporting Act
To prevent identity theft
To improve resolution of consumer disputes
To improve the accuracy of consumer records
To make improvements in the use of, and consumer access to, credit information

Effective Dates: A reasonable time must be permitted for banks and other creditors to adopt procedures and policies but compliance must be effective no more than 10 months after the final regulations are issued. This means that by December 2004, creditors and credit reporting agencies must be in compliance at that time.

Portions by Bank-rate and PLPW.com