Financial Privacy (GLBA, FCRA, and FACTA) Flashcards

The Fair and Accurate Credit Transactions Act (FACTA) most significantly amended FCRA by establishing:

Answer: The right to one free credit report per year from each major consumer reporting agency

FACTA created the right for consumers to obtain one free credit report annually from each of the three major CRAs — Equifax, Experian, and TransUnion — through AnnualCreditReport.com.

FACTA's 'Red Flags Rule' requires covered entities to:

Answer: Develop and implement written programs to detect and respond to identity theft red flags

The Red Flags Rule mandates that financial institutions and creditors establish written identity theft prevention programs that identify warning signs (red flags) and prescribe responses.

When a consumer reports identity theft under FACTA, what right does the consumer have regarding their credit report?

Answer: Place a fraud alert and block fraudulent information resulting from the identity theft

FACTA gives identity theft victims the right to place initial or extended fraud alerts on their credit files and to block fraudulent tradelines or inquiries resulting from the theft.

FACTA's truncation requirement mandates that electronically printed receipts:

Answer: Display only the last 4 or 5 digits of the payment card number and omit the expiration date

FACTA requires that electronically printed receipts show no more than the last 5 digits of the card number and must not display the expiration date to reduce risk of fraud.

A key distinction between GLBA and stronger privacy laws is that GLBA generally requires only an 'opt-out' mechanism rather than 'opt-in' consent, meaning:

Answer: Consumers must actively choose to prevent sharing rather than actively agreeing to permit it

GLBA's opt-out model places the burden on consumers to affirmatively decline sharing; information is shared by default unless the consumer acts, which is a weaker protection than requiring opt-in consent.

Which federal agency has broad enforcement authority over FCRA compliance for most non-bank companies?

Answer: Federal Trade Commission (FTC)

The FTC holds broad enforcement authority under FCRA for most non-bank entities, while the CFPB handles enforcement for larger banks and other financial institutions.

Under FCRA, a 'consumer reporting agency' is defined as any entity that:

Answer: Regularly assembles or evaluates consumer credit information for furnishing consumer reports to third parties

FCRA defines a consumer reporting agency as any entity that regularly assembles or evaluates information about consumers for the purpose of preparing consumer reports provided to third parties.