This article was published on:06/01/2005 BLANCHE EVANS Stopping identity theft Do You Comply With the FACT Act?
A new federal law requires you to destroy consumer information before throwing it in the trash.
BY BLANCHE EVANS
All companies or individuals who deal with sensitive consumer information must change the way they do business under a provision of the federal Fair and Accurate Credit Transaction Act that went into effect June 1.
The new rule requires real estate brokerages, mortgage lenders, landlords, and others to destroy all information taken from consumer reports before throwing it in the garbage. Consumer reports include credit reports, credit scores, employment background reports, check-writing histories, insurance claims, residential or tenant records, and medical histories.
"FACTA applies to anybody who maintains consumer information and any business that's regulated by the Federal Trade Commission," says Stacey DiPiazza, owner of Infoshred LLC, a document-destruction company in South Windsor, Conn.
The FTC, which enforces the rule, suggests that companies put policies into place to ensure that the sensitive data can’t be recreated by identity thieves. Some of the best options for destroying data include shredding, burning, and pulverizing—although the FTC gives companies the freedom to choose how to destroy the data.
Those who don’t comply can face severe penalties, which may include civil liabilities, class-action lawsuits, and state and federal enforcement actions. So forget about throwing mortgage approvals from lenders into the trash or tossing a tenant history in the recycling bin—now those documents must be beyond recognition before they are thrown away.
And the rule covers more than just what’s on paper: "FACTA covers any medium that contains personal information, whether it's paper, CDs, discs, or even hard drives," DiPiazza says. She suggests hiring a reputable professional service to see that data is destroyed.
Professional shredding services, for example, will safeguard documents from the time they are discarded to the time they are destroyed and disposed of. Employees who handle the sensitive data are background-checked for security purposes, and disposal companies typically offer the option of shredding the documents on-site or transporting them in an alarmed, locked truck to its facility for destruction.
Infoshred even tracks their trucks by satellite along its route to its secured facility as an extra precaution. "When the documents reach our facility, they are shredded within 24 hours," DiPiazza says. "Once the material is shredded, it is baled, re-pulped, and reprocessed into recycled goods."
To comply with the new provision, she says real estate professionals should:
Establish internal policies and procedures that dictate how you are going to handle confidential information. These guidelines should include such things as: defining confidential information, explaining how it will be handled, and setting deadlines for destruction. "The idea is to clearly establish how sensitive information will be handled, and to develop a logistical flow for the paper that contains it," DiPiazza says.
Decide how to handle material other than paper. People often forget that CDs, diskettes, and even hard drives contain personal data and must be destroyed under the new laws. When you're upgrading your computers, you must decide what you're going to do with the old ones so you protect the consumer information that they contain.
Bring in a qualified destruction vendor. If you've never worked with this kind of outside resource, look at a firm's security policies and procedures, insurance coverage, and references. Check if the vendor is certified by the National Association for Information Destruction Inc., a Phoenix-based trade group that dictates standards for that industry, and look into their methods of employee screening and security. Both the trucks and the company's facilities need to be secure, and the facility should be monitored 24 hours a day. You also should feel welcome to visit the facility at any time, and the company should be more than agreeable if you want to witness the destruction of your material. Lastly, pick a company that is experienced in document destruction, not just waste management. There is a difference.
Learn More
FTC Business Alert
On this Web page, the FTC offers a clear explanation of who must comply with the new disposal rule, what information must be destroyed, and what you can do to dispose of the information property.
National Association for Information Destruction Inc.
NAID is the international trade association for companies providing information destruction services. The Web site allows you to search for member companies and certified disposal operations in your area.
(c) Copyright 2005 Realty Times. Reprinted with permission.
