Federal Privacy Protection and Consumer Identification Laws

Gramm-Leach-Bliley Act (GLB Act)

To protect and regulate the disclosure of consumers personal financial information. Three principal parts to the privacy requirements: The financial privacy rule The safeguards rule Pre-texting provisions

The fact act allows consumers to:

Request and obtain a free copy of the credit report once every 12 months

Red flags rules

-Financial institutions and creditors to implement around identity theft prevention program - card issuer is to assess the validity of change of address request - users of consumer reports to reasonably verify the identity of the subject of a consumer report an event of a notice of address discrepancy

Provisions to FACT Act

-Identity theft prevention and credit history restoration -improvements in use of and consumer access to credit information -enhancing the accuracy of consumer report information - limiting the use and sharing of medical information in the financial system - Financial literacy and education improvement - protecting employee misconduct investigations - relation to state laws

Consumer reporting agency obligations

-can't report outdated information . Can't report negative information more than 7 years or bankruptcies more than 10. -must limit access to credit report - legitimate business need -may not give out consumer credit information to employer or potential employer, without consumer consent - must include initial fraud alert - must provide a national credit freeze fuel charge to consumers Disclosures: Summary of consumer rights, summary of consumer identity theft rights, the rest of national security freeze right

Customer

A consumer with a continuing relationship with a financial institution

Fair Credit Reporting Act (FCRA)

A federal law dealing with the granting of credit, access to credit information, the rights of debtors, and the responsibilities of credtors. Provide consumers with the rights to: - an adverse action notice - A copy of a consumer credit report - request their credit score - dispute incomplete or inaccurate information - limit prescreened offers

Creditor

A person who regularly extends consumer credit that is subject to a finance charge or is paid by written agreement in more than four installments, and to whom the obligation is originally payable

Credit Report

A statement that has information about your credit activity and current credit situation such as loan pain history and the status of your credit accounts

Established Business Relationship

A telemarketer or seller may call a consumer with whom it has established business relationships for up to 18 months after the consumers last purchase, delivery, or payment, even if the consumers number is on the national do not call registry. In addition a company called consumer for up to three months after the consumer makes an inquiry or submits an application to the company. If a consumer has asked to be put on the company's internal do not call list, a company may not call, even if there is an EBR

Consumer

An individual who obtains, or has obtained, financial product or service from a financial institution for personal, family, or household reasons, usually with a one time transaction

Adverse Action Notice

Any entity that uses a credit report or consumer report to deny an application for credit, insurance, or employment, or takes another adverse action must provide the consumer the agency that provided the information

Dispute incomplete or inaccurate information

Consumers have the right to dispute any incomplete or inaccurate information found in their credit report. The consumer reporting agency must correct or delete an accurate, incomplete, or unverifiable information.

Financial privacy rule

Covers the collection and disclosure of customers personal financial information known as non-public personal information, restricting when an under what circumstances such information may be disclosed to affiliates and two non-affiliated third parties

Secure and dispose

Fact act requires businesses to take measures for security and disposal. - Burning or shredding papers - destroying or erasing electronic files or media - placing all pending loan documents in locked desks, cabinets, or storage rooms

Fair and Accurate Credit Transactions Act (FACTA)

Intended primarily to help consumers find the growing crime of identity theft

National do not call registry

Is managed by the Federal Trade Commission, The nations consumer protection agency, and enforced by the FTC, the federal communications commission, and state law enforcement officials. Telemarketing calls must be within the hours of 8 AM and 9 PM. Company must maintain national list of customers and prospects and keep them updated regularly and must be updated every 31 days and records to document this must be maintained for 24 months Violators could be fined up to $41,484 per car

Consumer privacy policy

Notice provided to the consumer explaining the lenders information collection procedures information sharing and transfer practices. - Financial institution must disclose this policy to consumers before they disclose personal information, disclose the policy annually, provide consumer instructions on how to opt out

Credit Score

Predicts how likely you are to pay back a loan on time

The fact act prohibits businesses from:

Printing more than five digits of any customers credit/debit card number or expiration date on any receipt provided to the card holder at the point of sale or transaction

Pre-texting provisions

Protects consumers from individuals and companies that obtain their personal financial information and false, fictitious, or fraudulent pretenses

Safeguards rule

Requires all financial institutions to design, implement, and maintain safeguards to protect customer information while it is in the custody and control of the institution and its agents

USA Patriot Act

Requires lenders and banks to create and maintain customer identification program to prevent financing of terrorist operations and money laundering

Access to credit reports

The FCRA only allowed consumers a free copy of their credit report from a consumer credit for an agency under these circumstances: -The information in a credit report resulting in adverse action - consumer was a victim of identity theft and a fraud alert was inserted in the credit report - The credit report contains an accurate information as a result of fraud - consumer is on public assistance or unemployed