CIPP Financial Privacy (GLBA, FCRA, and FACTA) 3

Question 1

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

Accepted Answer

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

Answer

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.

Question 2

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

Accepted Answer

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

Answer

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.

Question 3

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

Accepted Answer

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

Answer

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.

Question 4

FACTA's truncation requirement mandates that electronically printed receipts:

Accepted Answer

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

Answer

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.

Question 5

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:

Accepted Answer

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

Answer

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.

Certified Information Privacy Professional Practice Test

Certified Information Privacy Professional Practice Test

CIPP Financial Privacy (GLBA, FCRA, and FACTA) 3