Facta and prepaid cards

Learn about Facta and prepaid cards and what the Fair and Accurate Credit Transactions Act means.

FACTA is an acronym of Fair and Accurate Credit Transactions Act, which focuses mainly on preventing consumers from identity theft. Prepaid credit card receipts include full details about the account number and expiration dates.

This helps the identity thieves to steal some personal information. FACTA now imposes certain restrictions on prepaid credit cards to truncate account number and other information.

The Red Flag rules of FACTA lend support to protect the consumers from foreseeable risks. The credit card issuers need to identify and respond to Red flags. They must take steps to avoid identity theft. The prepaid credit card issuers must deal with address discrepancies and changes of address.

FACTA also insists credit card issuers to place fraud alerts in their report so as to prevent identity thieves from using their names to open fraudulent accounts. It is also essential to block some data that is being reported by credit bureau.

There are some provisions given by FACTA that prohibits free access of personal and financial information on the prepaid card by the identity thieves. The companies need to give alerts or warnings about possible identity thefts in prepaid cards.

The identity thieves easily notify credit card issuer of a change of address. The thief may ask the card issuer for replacement cards immediately after the change of address notice. FACTA therefore insists the card issuer to pay attention to assess the validity of a change of address. The condition applies at least within the first 30 days after the change of address notification.

Though FACTA restricts the issuers to print the account number in the card holder’s receipt, there are some loopholes. The rule does not apply to receipts, which primarily concerns with recording the credit card number. Such recording must be done by handwriting or by an imprint.

Fair and Accurate Credit Transactions Act

Facta and prepaid cards