The rule affects not only large corporations such as lenders,
insurers and debt collectors, but also car dealers, landlords and
those individuals who decide to check out prospective home
employees, such as nannies or cleaners.
Anyone, in fact, who uses a consumer report for a business
purpose will now have to comply with the Disposal Rule, part of the
Fair and Accurate Credit Transactions Act (FACTA) of 2003.
FACTA directed a number of federal agencies, including the
Federal Trade Commission, the Federal Reserve Board and the
Securities and Exchange Commission, to set up consistent rules
regarding the disposal of sensitive consumer report information, in
an attempt to tackle the growing problem of identity theft.
The
FTC
published its Disposal Rule in November
last year, and it came into force on 1st June.
The disposal standard set by the Rule is flexible, and requires
disposal practices that are reasonable and appropriate to prevent
the unauthorised access to – or use of – information in a consumer
report.
According to the
FTC
this could include: burning,
pulverising, or shredding papers; destroying or erasing electronic
files or media; or conducting due diligence and hiring a document
destruction contractor to dispose of the material.
Although the Disposal Rule applies only to consumer reports and
the information derived from consumer reports, the
FTC
encourages those who dispose of any records containing a consumer's
personal or financial information to take similar protective
measures.
