Beginning on June 1, 2005, new law will require employers to "take reasonable measures" to keep consumer information out of the hands of those who are not authorized to see or use it. Released by the Federal Trade Commission pursuant to the Fair and Accurate Transaction Act (FACTA) of 2003, the Disposal Rule covers the disposal of consumer information in paper, electronic, or other forms, but only if it is information derived from a consumer report as defined by the Fair Credit Reporting Act.

The new regulation addresses the destruction of consumer information obtained about current employees, former employees, job applicants, customers and vendors through credit checks, background checks, or other business investigations, but only if the information is in the form of a consumer report or is derived from a consumer report. All information covered by the regulation must be disposed of in a way that reduces the chance it will be stolen by an identity thief.

"Reasonable measures" will differ depending on a company's size, capabilities, and the amount of sensitive personal information it generates or obtains, however even the smallest firm should review the way it disposes confidential consumer information, such as that found in background checks from Frasco® Profiles. At the very least, companies should shred all consumer information before throwing it away, especially if the garbage sits in an accessible area before being taken away.

It is also recommended that companies do periodic audits to be sure nothing is overlooked. Audits should include reviewing disposal procedures for paper records as well as electronic information that is stored on computer discs, hard drives and other storage devices.

For more specific information on the Disposal Rule and recommended methods of disposal, please refer to the Federal Trade Commission's document, "Disposing of Consumer Report Information? New Rule Tells How" located at:

http://www.ftc.gov/bcp/edu/pubs/business/alerts/alt152.shtm




NOTE: This summary is being provided solely as a courtesy. It is intended to provide a brief snapshot of legislation potentially affecting end-users. It should not be construed as providing a comprehensive discussion of this or any law. This summary should not be construed in any way as legal advice. Parties receiving this summary are encouraged to consult with legal counsel to ensure that they are complying with all applicable laws affecting end-users in their jurisdictions.