Property Grunt

Friday, October 14, 2005

Credit Reports Revisted

I am reposting my entry on the FACTA disposal rule which applies to disposal of credit report and other sensitive financial information. I got an email from a reader about the verification of an agent's standing which led to me thinking about credit reports.

Beginning today, a new federal rule will require businesses and individuals to take appropriate measures to dispose of sensitive information derived from consumer reports. Any business or individual who uses a consumer report for a business purpose is subject to the requirements of the Disposal Rule, a part of the Fair and Accurate Credit Transactions Act of 2003 (FACTA), which calls for the proper disposal of information in consumer reports and records to protect against “unauthorized access to or use of the information.”

Whenever you are putting in a credit report make sure you get a copy of the report and a receipt if you have paid for it. Also make it clear to the agent you are working with that you expect any sensitive documents relating to your financial situation to either be returned or destroyed as soon your business has been concluded. If your agent is uncooperative then send them this link and they will get the picture.

On a recent entry by the Realtygram Blogger the Federal Trade Commission has initiated the Fair and Accurate Credit Transactions Act aka FACTA that will go in effect in June which will further aid consumers in the fight against identity theft.

The great thing about this act is it places the burden of responsibility upon the parties that engage in business of credit reports particularly in the disposal of credit reports. According to Facts on Facta

Disposal of Consumer Reports

In the past, the practice known as “dumpster diving” has provided identity thieves with a wealth of personal data. Irresponsible information disposal by businesses has been cited in numerous instances of fraud. Now, under new FACTA provisions, consumer reporting agencies and any business that uses a consumer report must adopt procedures for proper disposal.

The FTC, the federal banking agencies, and the National Credit Union Administration (NCUA) have published proposed regulations to implement the new FACTA Disposal Rule. To see the comments submitted by the PRC and other consumer organizations in response to these rule proposals,

At one rental office the Grunt knows one manager never purchased a shredder because the manager was just too cheap. Its not uncommon for credit reports to be still in the possession of agents and are stored in their unlocked desks. The Grunt knew one agent that went through almost 30 files of clients and destroyed the credit reports and other personal information by hand when they were leaving their company/

According to the Federal Trade Commission features of FACTA will include measures that will allow victims of identity theft to stop and repair the damage that has been done to their credit.

A provision that will require credit reporting agencies to stop reporting allegedly fraudulent account information when a consumer establishes that he or she has been the victim of identity theft;

A provision that requires creditors or businesses to provide copies of business records of fraudulent accounts or transactions related to them. “This information can assist victims in proving that they are, in fact, victims. For example, they may be better able to prove that the signature on the application is not their signature;” and,

A provision that will allow consumers to report accounts affected by identity theft directly to creditors - in addition to credit reporting agencies - to prevent the spread of erroneous credit information.

The Grunt's advice is the following, when you are applying for an apartment adopt a chain of evidence strategy of keeping track of where your credit report is going whether it starts from agent or landlord. Get a receipt for the credit report if you are paying for it as evidence of a paper trail and a copy of the credit application. Also ask the agent in question who will be handling the credit. If you are a victim of identity theft and circumstantial evidence shows that it occurred during the time frame of your application you at least have a paper trail and can hold someone accountable.

Also get your own copy from the agent; after all you paid for it. If you are getting one through a landlord or property management company they may not be as willing to part with the credit report. My advice is to consult with a lawyer what your rights are when dealing with a landlord/property management company.

Know FACTA and the FTC information regarding it cold so you know that your rights are not being violated. If you want to keep an agent on their toes ask if they have a paper shredder and if they don't have one grill them on why and that they are in danger of violating federal law. One of the advantages of using a broker is that they are beholden to certain laws but some agents need to be reminded of that.

Identity theft is serious. The Grunt knew of one person who had the misfortune of inviting one in their home. It was not pretty.