Identity Theft Protection Laws

The enactment of legislation such as the Fair and Accurate Credit Transaction Act (FACTA), the Gramm-Leach-Bliley Act (GLBA) and the Federal Trade Commission Act make owners and management of businesses liable when nonpublic information is exposed. In many instances, businesses are unaware of these government regulations and do not recognize the scope of the legislation or their business and personal liability.

The Fair and Accurate Credit Transaction Act (FACTA), passed in 2003, and enforced by the Federal Trade Commission (FTC) applies to every business that maintains, possesses or collects personal information relating to customers or employees. This includes but is not limited to names, social security numbers, credit card numbers, birthdates, and home addresses.

Covering a variety of topics, FACTA affects the way business is conducted, how consumer information needs to be stored and when it can be shared. This legislation allows for federal penalties, civil liability and class-action lawsuits and has no statutory limitation. FACTA also provides an avenue for lawyers to file lawsuits against businesses on behalf of customers or employees.

FACTA holds businesses liable for actual losses when an individual’s finances are affected through negligence or disregard of this law’s requirements. Lack of knowledge is not a defense.

FACTA is only one piece of legislation that affects businesses. The Gramm-Leach-Bliley Act (GLBA) Safeguard Rule and the Federal Trade Commission Act, each have their own fines and penalties for non-compliace. GLBA was passed in 1999 and requires companies to design a privacy policy and adhere to safeguard rules. Individual states have also enacted data security laws to further protect their citizens from this growing threat.

Since identity fraud continues to be a significant problem in the United States, the FTC is actively enforcing policy. It monitors companies for unfair or deceptive practices and takes action against those with lax privacy and security policies that leave consumer information at risk of loss or theft. The FTC drives home the importance of guarding personal data with significant penalties.