Detecting Identity Theft

Negative Information In a Consumer Report.

The number one tip for detecting identity theft is to check your credit report regularly. Erroneous information about late payments and collection actions is what you don’t want to see. But catching fraud early enables you to more quickly regain your financial health.

FACTA now requires creditors to give you what might be called an “early warning” notice. This notice could alert you that something is amiss with an account. However, the notice is not a substitute for your own monitoring of credit reports, bank accounts, and credit card statements. And, you may have to look closely to even see this new notice. A financial institution that extends credit must send you a notice before or no later than 30 days after negative information is furnished to a credit bureau. Negative information includes late payments, missed payments, partial payments, or any other form of default.

Does this apply only to my accounts with a bank?

No. A “financial institution” has the same meaning as under the Gramm-Leach-Bliley Act. In addition to a bank, this can mean a merchant that extends credit to you or a collection agency that routinely reports information to a credit bureau. For more on non-bank entities that are considered “financial institutions,” see the FTC publication, How To Comply with the Privacy of Consumer Financial Information Rule of the Gramm-Leach-Bliley Act, www.ftc.gov/bcp/edu/pubs/business/idtheft/bus67.shtm.

Do I get a notice every time the account is delinquent?

It’s a one-time notice as long as the late payment or other negative information has to do with the same account. After the one-time notice, the financial institution can continue to report negative information about the same account. For example, if you are late on your credit card payment three months straight, you are only entitled to the notice either before or within 30 days after the first late payment is reported.

Will I receive a separate notice or registered letter?

You will almost certainly not receive a registered letter. FACTA requires the financial institution to give you this notice along with “any notice of default, any billing statement, or any other materials provided to [you].” The one place the notice cannot appear is in the Truth in Lending Act notice you get when you first open an account. The notice must be “clear and conspicuous,” but need not be in bold or enlarged type. The Federal Reserve Board (www.federalreserve.gov) was directed by Congress to write sample notices for financial institutions. The Board has finalized the regulation, at
www.federalreserve.gov/BoardDocs/Press/bcreg/2004/200406082/default.html The sample notices adopted by the Federal Reserve Board are short and to the point.

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