Printer Friendly

Businesses, banks must protect consumer records, U.S. says.

The U.S. Federal Trade Commission (FTC) has issued its final rule on the proper disposal of consumer report information and records under the Fair and Accurate Credit Transactions Act of 2003 (FACTA) and the Fair Credit Reporting Act (FCRA).

FACTA, which was enacted on December 4, 2003, amends the FCRA and directs the FTC, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the Office of Thrift Supervision, the National Credit Union Administration, and the Securities and Exchange Commission (SEC) to cooperate to adopt comparable and consistent rules regarding the disposal of sensitive consumer report information. The purpose of these rules is to reduce the risk of identity theft and other consumer harm resulting from improper disposal of consumer reports or any records derived from them. The FTC's Disposal Rule applies to people or entities under FTC jurisdiction that maintain or otherwise possess consumer report information for business purposes.

The rule requires that covered entities "take reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal." The standard for disposal is flexible to allow entities to determine what measures are reasonable based on the sensitivity of the information, the costs and benefits of different disposal methods, and relevant changes in technology over time. The rule's flexibility should also facilitate compliance for smaller entities. Additionally, the rule includes specific examples of appropriate measures that would satisfy its disposal standard. The final rule makes minor modifications to the proposed rule, including clarification of the definitions of "consumer information" and "disposal." The final rule will become effective June 1, 2005.

The Office of the Comptroller of the Currency, the Federal Reserve Board, Federal Deposit Insurance Corp., and the Office of Thrift Supervision are adopting a final rule to implement Section 216 by amending the Interagency Guidelines Establishing Standards for Safe-guarding Customer Information.

The SEC approved amendments to the rule requiring financial institutions to adopt policies and procedures to safeguard customer information. The amended rule, which went into effect January 11, implements the provision in Section 216 of the Fair and Accurate Credit Transactions Act of 2003 requiring proper disposal of consumer report information and records. The amendments also require the policies and procedures adopted under the safeguard rule to be in writing.
COPYRIGHT 2005 Association of Records Managers & Administrators (ARMA)
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2005, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:News, Trends & Analysis
Author:Swartz, Nikki
Publication:Information Management Journal
Geographic Code:1USA
Date:Mar 1, 2005
Previous Article:FBI dumps information-sharing software.
Next Article:Ohio government officials must comply with public records laws or face fine.

Related Articles
Statements to the Congress.
2002 annual index.
Public policy. (Resources).
Want the CIA director's address? Get it for $26 online.
Much more than jobs being outsourced.
Database debacles: individuals' privacy is rapidly eroding as more and more of their most intimate information is collected and sold by data brokers...
SourceMedia launches news service, e-book & e-mail title.
Increase safeguards on identity theft.
New title from Euromoney division.

Terms of use | Privacy policy | Copyright © 2021 Farlex, Inc. | Feedback | For webmasters |