New FTC Disposal Rule on Credit Information
  

 

Effective beginning June 2005, the Federal Trade Commission has enacted a new Disposal Rule to protect consumers from identity theft by requiring users of credit information to completely and securely dispose of that information when it is no longer needed.

 

The Disposal Rule applies whenever you need to dispose of a credit report or any information that came from a credit report. This includes all records about an individual, including social security numbers, driver's license numbers, phone numbers, physical addresses, and email addresses. The new rule covers all consumer information stored in electronic or paper form. The Disposal Rule does not apply to statistical information or blind data that does not identify particular consumers.

 

You must take "reasonable measures" to protect consumer information from any unauthorized access or use both during and after the disposal process. First, make sure policies and procedures that cover the disposal of consumer information are established. Second, employees need to be properly trained in these policies and procedures.

 

The "reasonable measures" standard is somewhat flexible, depending on the specific circumstances of each organization's use of consumer information. Generally, reasonable measures include implementing policies and procedures to shred or burn documents and to smash or wipe clean electronic media.

 

If a business prefers to contract with a waste disposal service to dispose of consumer information, care must be taken to make the disposal service aware of the new Disposal Rule's requirements. If a waste disposal service handles regular garbage along with sensitive consumer information covered under the new Rule, then procedures should be established to inform the disposal service when the organization is throwing away sensitive information. Following this procedure will give disposal service providers an opportunity to take special care in the disposal of consumer records.

 
 

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