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The Fair and Accurate Credit Transactions Act (FACT Act) of 2003 amends the Fair Credit Reporting Act (FCRA) to enhance consumer experiences and safety when dealing with the collection, sharing, and usage of credit information.
The FACT Act applies to every consumer and every business in the United States.
The FACT Act of 2003 amends the FCRA to:
The Act includes several effective dates based on priority, industry preparation time, and other policy concerns. The Federal Trade Commission and the Federal Reserve System are authorized to prescribe regulations relating to the FACT Act.
Employee misconduct investigation exclusion. The FACT Act, in part, amended the FCRA to provide exclusion for certain employee misconduct investigations. Employers are allowed to use consumer reporting agencies to investigate suspected employee misconduct, such as sexual harassment, without being required to obtain the employee’s consent first.
The change alters the effect of what is known as the “Vail Opinion Letter,” which stated that employers who hired third-party organizations to investigate allegations of sexual harassment had to provide prior notice to the individual being investigated and get that individual’s approval, under the FCRA.
With the new amendment, this hurdle is removed, making it easier to perform workplace investigations and reducing risk to whistleblowers. Employers must still provide notice to employees, but not until after the investigation. Also see the EZ Explanation called Fair Credit Reporting Act.