Which statement about FACTA is true?

Which statement about FACTA is true?

• A. It requires businesses to safeguard against theft when disposing of consumer reports.
• B. It bans all consumer reporting.
• C. It eliminates the need to provide credit score disclosures.
• D. It imposes no new identity theft protections.

Answer: (A)

The key idea is that FACTA adds safeguards for how firms handle and dispose of consumer information. A central provision is the disposal rule: organizations must take reasonable steps to securely destroy records that contain consumer report information so that data can’t be retrieved or misused after disposal. This is why the statement about safeguarding against theft when disposing of consumer reports is true—FACTA directly requires secure disposal practices to reduce identity theft risk. The other statements don’t fit FACTA. It does not ban all consumer reporting; instead, it adds protections and rights for consumers. It also doesn’t eliminate the need to provide credit score disclosures, and FACTA does introduce additional identity theft protections, not the opposite.

The key idea is that FACTA adds safeguards for how firms handle and dispose of consumer information. A central provision is the disposal rule: organizations must take reasonable steps to securely destroy records that contain consumer report information so that data can’t be retrieved or misused after disposal. This is why the statement about safeguarding against theft when disposing of consumer reports is true—FACTA directly requires secure disposal practices to reduce identity theft risk.

The other statements don’t fit FACTA. It does not ban all consumer reporting; instead, it adds protections and rights for consumers. It also doesn’t eliminate the need to provide credit score disclosures, and FACTA does introduce additional identity theft protections, not the opposite.