CREDIT REPORTS, IDENTITY THEFT, AND FINANCIAL PRIVACY: US CONSUMERS ’ RESPONSE TO FACTA

In December 2004, the three major US credit bureaus (Equifax, Experian, and TransUnion) began offering free copies of their credit file disclosures (also known as credit reports) to any consumer who requested it. The bureaus were acting in compliance with the Fair and Accurate Credit Transaction Act (FACTA). The FACTA initiative was overseen by the Federal Trade Commission, and was significant for several reasons: (1) it was one of the first and largest initiatives by the federal government aiming to alleviate the rising concerns with identity theft; (2) it mandated private sector companies to offer some of their products and services for free to the general public. However, to date, no data about the public response to the initiative has been provided by the FTC or the reporting agencies themselves. This paper presents the results of a survey of a representative sample of US consumers ’ response to FACTA. Our data analysis provides the first look at the success of the initiative as well as the likely motivations for US consumers to request copies of their credit reports. We find that education, income and awareness strongly impact credit report request rates. Such information can also help us understand consumers ’ interest in their financial information and, indirectly, their sensitivity towards the privacy of their financial data. 2