This 25-minute course covers The Fair and Accurate Credit Transactions Act (FACT Act or FACTA) of 2003, which provides consumers with increased protection from identity theft and a better understanding of their credit reports and rights. This Act affects both consumers and financial institutions, and is governed by the Federal Trade Commission. Under the FACT Act, as a consumer, you have free annual access to credit reports. You will also have better information about opting out of prescreened credit offers. As people who deal with consumer credit reports, this Act had quite an effect on mortgage professionals. Implementation of FACTA created disclosures and other provisions of credit information management that dramatically changed how mortgage lenders and brokers communicate with consumers.
FACTA is an amendment to the Fair Credit Reporting Act, which protects information collected by consumer reporting agencies. To understand the whole scope as to why FACTA was created, we will begin with a brief introduction and explanation of the Fair Credit Reporting Act and how it applies to the mortgage industry. We will then discuss why FACTA was enacted and the special requirement it created for mortgage lenders. We will end the course by discussing the Red Flags Rule, which amended FACTA in 2007, and mandates that all mortgage lenders and brokers must have a written identity theft plan to detect, prevent and mitigate identity theft in connection with certain financial accounts.