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Elevated Shredding

Locally Owned and Operated in Flagstaff, AZ

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FACTA - Fair and Accurate Credit Transactions Act

The Disposal Rule, a part of the Fair and Accurate Credit Transactions Act of 2003 (FACTA), which calls for the proper disposal of information in consumer reports and records to protect against “unauthorized access to or use of the information.”

Protect your data from online criminals with companies who comply with FACTA

Who must comply to FACTA?

The Disposal Rule applies to people, both large and small organizations that use consumer reports. Among those who must comply with the Rule are:

  • Consumer reporting companies

  • Lenders

  • Insurers

  • Employers

  • Landlords

  • Government agencies

  • Mortgage brokers

  • Automobile dealers

  • Attorneys or private investigators

  • Debt collectors

  • Individuals who obtain a credit report on prospective nannies, contractors, or tenants

  • Entities that maintain information in consumer reports as part of their role as service providers to other organizations covered by the Rule

The Disposal Rule applies to consumer reports or information derived from consumer reports. The Fair Credit Reporting Act defines the term consumer report to include information obtained from a consumer reporting company that is used – or expected to be used – in establishing a consumer’s eligibility for credit, employment, or insurance, among other purposes. Examples of consumer reports include credit reports, credit scores, reports businesses or individuals receive with information relating to employment background, check writing history, insurance claims, residential or tenant history, or medical history with the correct "proper" disposal.

Hospitals and medical clinics must properly destroy sensitive data

What Is "Proper" Disposal?

The Disposal Rule requires disposal practices that are reasonable and appropriate to prevent the unauthorized access to – or use of – information in a consumer report. For example, reasonable measures for disposing of consumer report information could include establishing and complying with policies to:

  • Burn, pulverize, or shred papers containing consumer report information so that the information cannot be read or reconstructed;

  • Destroy or erase electronic files or media containing consumer report information so that the information cannot be read or reconstructed;

  • Conduct due diligence and hire a document destruction contractor to dispose of material specifically identified as consumer report information consistent with the Rule. Due diligence could include:

    • reviewing an independent audit of a disposal company’s operations and/or its compliance with the Rule

    • obtaining information about the disposal company from several references;

    • requiring that the disposal company be certified by a recognized trade association

    • reviewing and evaluating the disposal company’s information security policies or procedures.

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