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Proper disposal of client records.

Recently in Florida, an attorney's discarded files were found in a dumpster. Found by the owners of another local business, the discarded files contained clients' pay stubs, medical records, Social Security numbers, and a raft of otherwise confidential information. The question has often been asked of practice management advisors in LOMAS, "Do the Rules of The Florida Bar require that client records be shredded?" Actually, the Rules Regulating The Florida Bar do not address a method of destruction. Ethics opinion 81-8 only states they may be destroyed and no manner is addressed.

Opinion 81-8: "A lawyer who intends to dispose of clients' files should make a diligent attempt to contact all clients and determine their wishes concerning their files. The file of any client who cannot be located must be reviewed individually and may be destroyed only after it is determined that no important papers of the client are in the file."

However, members of the Bar are expected to abide by federal law.

The Fair and Accurate Credit Transactions Act, which was enacted in 2003, directed the FTC, the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the National Credit Union Administration, and the Securities and Exchange Commission to adopt comparable and consistent rules regarding the disposal of sensitive consumer report information. On June 1, 2005, the Federal Trade Commission published in the Federal Register [69 Fed. Reg. 68,690] the disposal rule under the Fair and Accurate Credit Transaction Act.

In an effort to protect the privacy of consumer information and reduce the risk of fraud and identity theft, this new federal rule requires businesses to take appropriate measures to dispose of sensitive information held in records. The Disposal Rule applies to consumer reporting companies; lenders; employers; landlords; government agencies; mortgage brokers; automobile dealers; attorneys or private investigators; debt collectors; individuals who obtain a credit report on prospective nannies, contractors, or tenants; and entities that maintain information in consumer reports as part of their role as service providers to other organizations covered by the rule.

The disposal rule requires disposal practices that are reasonable and appropriate to prevent the unauthorized access to--or use of--information in a consumer report. For example, reasonable measures for disposing of consumer report information could include establishing and complying with policies to:

* Burn, pulverize, or shred papers so that the information cannot be read or reconstructed;

* Destroy or erase electronic files or media containing information so that the information cannot be read or reconstructed;

* Conduct due diligence and hire a document destruction contractor to dispose of material. Due diligence could include:

* Reviewing an independent audit of a disposal company's operations and/or its compliance with the rule;

* Obtaining information about the disposal company from several references;

* Requiring that the disposal company be certified by a recognized trade association;

* Reviewing and evaluating the disposal company's information security policies or procedures.

To obtain additional information on FACTA's disposal guidelines visit www.ftc.gov.

By J. R. Phelps

LOMAS Director
COPYRIGHT 2007 Florida Bar
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Title Annotation:Practice Tips
Author:Phelps, J.R.
Publication:Florida Bar News
Geographic Code:1U5FL
Date:Mar 1, 2007
Words:506
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