| Compliance Update: FCRA Section 682 Summary |
Compliance Update: FCRA Section 682 Summary
Section 682 of the Fair Credit Reporting Act, as added by the FACT Act in 2003, became effective June 1, 2005, essentially requiring those who handle consumer information to properly dispose of it. In fact, Section 682 requires any entity under Federal Trade Commission (FTC) jurisdiction that maintains or possesses consumer information or any compilation of consumer information for a business purpose to "properly dispose of such information by taking reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal."
The FTC has stated that the purpose of the disposal requirement is to reduce the risk of consumer fraud and related harms, including identity theft, created by improper disposal of consumer information. It should be noted that this regulation not only applies to Consumer Reporting Agencies, but also to business entities that possess consumer information by virtue of a background report.
The rule defines "consumer information" broadly to include any record about an individual, regardless of the medium, that is a consumer report or is derived from a consumer report. To further define the reach of this provision, supplementary information provided by the FTC states that a record that does not identify a particular consumer would not qualify as "consumer information" because it would not be a "record about an individual."
If today you are conducting a background screening program or accessing consumer reports for other purposes, this recently enacted section addition to the FCRA could have an impact on the way your organization currently handles the compilation and disposal of consumer information. As such, it is recommended that organizations review the entire regulation with their legal counsel to determine the best approach for ensuring compliance with these requirements.
The final Section 682 update issued by the FTC can be found on the FTC web site at: http://www.ftc.gov/os/2004/11/041118disposalfrn.pdf |