Free Annual Credit Report Availability Under New FTC Rule

Under a recent amendment (the Fair and Accurate Credit Transaction Act (FACTA) to the federal Fair Credit Reporting Act (FCRA), nationwide consumer reporting agencies (CRA), such as Equifax, Experian, and Trans Union, are required to provide a consumer, upon the consumer's request, with a free copy of the consumer's credit report, once every twelve months.

There need not be a specific reason for the consumer's annual request; it is a matter of right. Under federal law, a consumer is also entitled to a free copy of the consumer's credit report:

1. If a company takes adverse action against the consumer, such as denying an application for credit, insurance or employment, and the consumer requests the copy within 60 days of receiving notice of the action.

2. If the consumer is unemployed and planning to seek employment within 60 days (one free report per year).

3. If the consumer is receiving welfare payments.

4. If the consumer's report is inaccurate because of fraud, including identity theft.

The Federal Trade Commission has issued its final rule regarding the free annual credit reports. The final rule requires the nationwide CRA's to establish a centralized source for accepting consumer requests for free annual credit reports (which are referred to as "annual file disclosures." This centralized source must include a dedicated Internet Web site, a toll-free telephone number, and a postal address.

The final rule provides a gradual roll-out of the centralized source, starting on the West Coast of the United States on December 1, 2004, and reaching the East Coast, including Virginia, on September 1, 2005.

More information may be found on the Federal Trade Commission Web site at www.ftc.gov., under the Consumers Section and under the Fair Credit Reporting Act Section.