San Diego, CA - Even though Congress met the December 31st deadline to amend and extend the Fair Credit Reporting Act, some of the items therein may not take effect until 2005 or beyond. The reason why is due, in part, to the complexity of the amendments and the way the law was written, which requires the Federal Trade Commission (FTC) to complete its rule making process before all of the new tools are available to consumers.

The nonprofit Institute of Consumer Financial Education (ICFE) an award winning consumer group based in San Diego, CA., has been closely following the new law's development over the past few months because of the ICFE's popular "Certified Credit Report Reviewer" (CRR) program now being revised and updated to conform with the new FACTA. The CRR package includes a study guide and examination - a passing grade is required for certification - and consumer guides to help consumers who find mistakes on their credit files. Many of the newly ICFE certified CRRs are financial planners, credit union and banking representatives, credit and debt counselors and pastors, among numerous other occupations who help consumers understand credit.

The FACT Act (FACTA) has plenty of new provisions will make it easier for consumers in all fifty states to deal with mistakes in their credit files, whether from human error or, worse yet, identity theft. Among the new FACTA provisions are a free copy, annually upon request, of credit reports from each of the three credit reporting agencies (CRAs), disclosure of credit scores, which are used by lenders when making lending decisions and several identity theft measures including ‘Fraud Alerts’ in and “Active Duty Alerts” (for members of the military) going into credit files.

When requesting free credit reports, the law includes a provision whereby the CRA’s must notify consumers of their right to get their credit scores, for a fee - which is yet to be determined, and also include an explanation of the various factors that may have a negative affect on a credit score.

Consumers will be able to dispute items directly to the creditor who wants to place a negative item on a credit report, in addition to the CRAs, plus those creditors must notify a consumer whenever negative information is going to be sent to a CRA for inclusion in a credit file. This is designed to reduce the number of inaccurate reports going into files because the consumer will know in advance and therefore may dispute it directly before a negative report is submitted to a credit file.

Further, to help consumers who are actively shopping for a mortgage, automobile or other type of loan, avoid having an incredible number of inquiries on their credit reports as a result, would receive a special notification from the CRA that these inquiries are lowering the consumer’s credit score.

Here is a detailed summary of some of the major amendments:

Provide consumers with a free credit report every year. A special procedure will be established by the FTC and the CRA’s for consumers to request their reports, which may not be ready until December 2004.

Give consumers the right to see their credit scores. A fee may be involved for revealing credit scores, however a mortgage company must tell home buyers the credit scores used in the process of providing the loan.

Provide consumers with clear instructions on how to opt-out of information sharing between affiliated companies for marketing purposes and how to stop companies from sending unsolicited offers of credit.

Ensure that consumers are notified if merchants are going to report negative information to the credit bureaus about them.

Allow consumers to place "fraud alerts" in their credit reports, which may remain for up to 90 days, to prevent identity thieves from opening accounts in their names. The alert entitles consumers to a second free report so they can check for unusual activity. Also, credit providers must take certain precautions before extending credit to consumers who have placed fraud alerts in their credit files. If there has been identity theft activity these purchases may not be included in a credit file. Further the CRA’s must make copies of the false transaction(s) available to both the victim and the local police department.

Consumers will be able to block information from being given to a credit bureau and from being reported by a credit bureau if such information results from identity theft. In addition no debt may be turned over to a collection agency if it’s resulting from an identity theft. If a consumer notifies a collector that the debt they are trying to collect is the result of identity theft, the collection agency must notify their client and also give all the information about the debt to the victim.

Special provisions protect active duty military personnel, by allowing them to place “Active Duty Alerts” on their credit files, so creditors will know they have been deployed overseas and are not shopping locally.

There is a provision to restrict access to a consumers' sensitive health information.

Provide consumers with one-call-for-all protection by requiring credit bureaus to share consumer calls on identity theft, including requested fraud alert blocking and active duty alerts.

Stop merchants from printing more than the last five digits of a payment card on electronic receipts. This is now being done by many merchants in all fifty states.

Lenders must also provide written notice to consumers if the terms of credit are higher than the prevailing market interest rates.

For help correcting credit file mistakes and free information about the credit file correction process, OR to learn how to become an ICFE Certified Credit Report Reviewer (CRR), please visit: www.icfe.info. 

To receive the same information by mail, please send $1 and a self-addressed, 60 cent stamped envelope to: ICFE, Credit File Mistakes, OR to ICFE- CRR Program PO Box 34070 San Diego, CA 92163-4070.