FACTA
FACTA (Fair and Accurate Credit Transactions Act)
The Federal Trade Commission (FTC) has issued a new rule that will require businesses to properly dispose of and destroy sensitive consumer data. The rule is one of several new requirements intended to combat consumer fraud and identity theft and protect privacy required by the federal Fair and Accurate Credit Transactions Act (FACT Act) which was enacted in December 2003.
The new FACT Act Disposal Rule broadly covers “any record about an individual, whether in paper, electronic, or other form that is a consumer report (also known as a credit report) or is derived from a consumer report.” It requires any person or company that possesses or maintains such information to take “reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal.”
The new rule provides examples of how to comply with the new requirements, including:
- Implementing and monitoring compliance with policies and procedures that require shredding or other forms of destruction of documents and electronic media containing consumer information.
- Contracting with a third party to properly dispose of consumer information and monitoring their performance.
