More on the Fair and Accurate Credit Transactions Act

Identity theft is no small matter and continues to be the fastest growing crime in America. A recent survey revealed that 9.9 million people were victims in a single year, at a cost to businesses and financial institutions of $48 billion, plus $5 million in out-of-pocket expenses for the victims.

A new federal law nicknamed "FACT" (the Fair and Accurate Credit Transactions Act) signed last December gives consumers greater protection by addressing the problems of identity theft, privacy and the inaccuracies of the consumer credit reporting system. Here's the least you need to know about this important new law.

Not yet effective: While the law was signed Dec. 4, 2003, most of its provisions are not effective until Dec. 1, 2004.

Free credit report: Every American will be entitled to one free credit report per year from the big three credit bureaus: Experian, EquiFax and Trans Union.

One call does it all: Whether your credit or debit card is lost or stolen, one call to a consumer reporting agency will notify all agencies and credit card companies.

Padlock your file: You will have the option to place a lock on your credit file. Before any credit is granted in your name, the bureau must verify through a phone call that it's you (and not an imposter) applying for credit.

Report the incident: If anyone other than you attempts to get credit in your name, the bank or institution will be required to provide you with copies of the evidence within 30 days of the event.

Truncate credit numbers: While many merchants and bankers already print only the last five digits of your account on electronic receipts, now it's the law. However, merchants have until Dec. 4, 2006, to phase out electronic equipment that does not comply.

Disclose the bad news: Thanks to this new law, a creditor will have to tell you if it reports any negative information about you to the credit bureaus. You will be able to dispute negative information directly to your creditors rather than going through the credit bureau.

Fair treatment: A bank will have to tell you if it grants you credit at less favorable terms than those received by most other consumers and why.

Run up the red flags: Regulators will be required to devise a list of "red flag" indicators to identify patterns, practices and specific forms of activity that indicate the possible existence of identity theft that could be threatening a consumer's credit file.

It's too soon to assess whether FACT has enough muscle to bring down identity theft. While I'm hopeful it will help, don't assume anything. Our best protection against identity theft continues to be our willingness to remain completely aware and reasonably suspicious

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