Professional in Human Resources (PHR) Practice Exam

What is the Fair and Accurate Credit Transaction Act (FACT) primarily designed to do?

1. Protect consumer rights in financial transactions

2. Provide relief to employers conducting workplace investigations

3. Ensure accuracy in employee payroll records

4. Regulate credit card transactions

The correct answer is: Provide relief to employers conducting workplace investigations

The Fair and Accurate Credit Transaction Act (FACT) is primarily designed to protect consumers by promoting the accuracy of consumer information in credit reports and enhancing their rights regarding identity theft. A key component of FACT is to give consumers access to their credit reports, allowing them to identify and dispute inaccuracies effectively. Additionally, the Act has provisions that help in the prevention and mitigation of identity theft, including requirements for institutions to implement safeguards to protect sensitive consumer data. This focus on accuracy in consumer credit records demonstrates the Act's central aim of protecting consumer rights within financial transactions. While it touches on various facets of the credit system, including identity theft protections, its primary mission revolves around ensuring that consumers have accurate and fair access to their credit information, thereby influencing their ability to engage in financial transactions and safeguarding their identities.