| FACTA |
What is FACTA?
 Enacted in December 2003, The Fair and Accurate Credit Transactions Act (FACTA) was adopted to ensure that all citizens are treated fairly when they apply for credit. This law will provide important new tools that expand access to credit and other financial services for all US consumers, enhance the accuracy of consumers' financial information, and help fight identity theft. These reforms make permanent the uniform national standards of our credit markets, and institute new, strong consumer protections.
FACTA and Records Disposal
The Federal Trade Commission (FTC) is developing rules under FACTA, including a rule governing companies' disposal of records that contain “consumer information” (The FACT Act Disposal Rule, R-411007). The Disposal Rule was proposed in April 2004 and the comment period closed this past June. It is anticipated that the FTC will issue the final Disposal Rule early in 2005. It will become enforceable three months after publication of the final rule.
The purpose of the proposed Disposal Rule is to reduce the risk of consumer fraud, including identity theft, created by improper disposal of any record that is, or is derived from, a consumer report. To further this objective, the proposed Disposal Rule requires that any person that possesses or maintains covered consumer information “take reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal.”
What Companies will be Affected by FACTA?
Any company, regardless of industry or size, that obtains, possesses or maintains consumer reports for a business purpose would be subject to the proposed Rule.
- Businesses that sell consumer information:
Consumer reporting agencies, resellers of consumer reports
- Businesses that use consumer reports:
Lenders, insurers, employers, landlords, government agencies, mortgage brokers, automobile dealers, etc
- Businesses that possess consumer information in connection with the provision of services to another entity: Records management companies, shredding companies, recyclers, or waste disposal companies
|
|
