How do I Keep Information Secure according to the Fair Credit Reporting Act?
Fair Credit Reporting Act — Also known as the FCRA, this law is designed primarily to protect the privacy of what it calls “consumer report” information — the details in a consumer’s credit report — and to guarantee that the information supplied by consumer reporting agencies is as accurate as possible. A consumer report contains information about individuals’ personal and credit characteristics, character, and general reputation. To be covered by the FCRA, a report must be prepared by a “consumer reporting agency,” a business that assembles reports for other companies. In your files right now you may have consumer reports on your employees if you’ve done background checks, perhaps as part of hiring. Or you may have consumer reports if you’ve needed to look into customers’ credit histories. You have a legal obligation to keep this information secure when it’s in your possession. But what about when you no longer have a legitimate business need to keep it? Scaling back on what’s in your files is a great idea as long as you show care in how you get rid of sensitive information like consumer reports. Under the FCRA, the FTC has issued a rule requiring companies to exercise care when pitching out consumer reports or information derived from them. Called the Disposal Rule, it requires businesses who have information covered by the FCRA to take reasonable measures when they dispose of it. Businesses that collect consumer credit information, credit reports, or employee background histories should be familiar with this rule and make sure they’re in compliance. (By the way, the FCRA was amended in 2005 by another law called the Fair and Accurate Credit Transactions Act, or FACTA. You may hear about FCRA or FACTA, but they both refer to the same law.)
For more information, see here: https://www.ftc.gov/legal-library/browse/statutes/fair-credit-reporting-act
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