FACTA legislation established uniform national standards to regulate business information and the need to destroy certain things to protect conumers. These are some key facts you need to know.
What is FACTA?
FACTA is the Fair and Accurate Credit Transactions Act of 2003. The Act amends its predecessor, the Fair Credit Reporting Act, to improve the accuracy of consumer reports and to allow consumers to exercise greater control over who has access to their personal information and how it will be used.
FACTA creates a lot of new positive protections for consumers. One component, related to the prevention of identity theft, is a requirement that merchants leave all but the last five digits of a credit card number off store receipts. FACTA also gives every consumer the right to obtain their credit report free of charge every year and creates a national system of fraud detection to make identity thieves more likely to be caught. All of this is good news for each of us as consumers, but how will it affect businesses?
What Businesses Does FACTA Affect?
FACTA will affect any person or business that compiles consumer information for a business purpose. Consumer information in the legislation is defined as “any record about an individual whether in paper, electronic, or other form that is a consumer report or is derived from a consumer report and all information that contains any compilation of consumer information.” In plain English this means that if you are creating consumer profiles with consumer information, those records are covered under FACTA. Furthermore, any employer regardless of industry or size that obtains a consumer report (including credit reports or pre-employment background checks) would be subject to the proposed rules. In short, FACTA is sweeping legislation that is going to affect almost all business people.
What Does FACTA Require?
FACTA protects consumer information compiled by businesses (see definition above) and states that the businesses are obligated to “properly dispose of it.” Proper disposal is not a trashcan or dumpster. Instead FACTA lists “reasonable measures” for document destruction.
What are FACTA’s “Reasonable Measures” for Document Control & Destruction?
FACTA will require businesses to implement and monitor a system of document destruction for paper and electronic records. The law states that business are required to make sure that upon discarding consumer information that it “cannot practicably be read or reconstructed.” The legislation specifically mentions shredding, pulverizing, or burning of printed information, and the erasure or destruction of electronic media.
FACTA requires “due diligence” on the part of businesses. In this instance the law stipulates that “due diligence” means after a business has implemented a destruction process they still have to be able to demonstrate that the process is actually protecting their consumer’s information. Businesses can handle destruction themselves, but they may be asked to provide proof of destruction, such as an outside audit.
If business enters into a contract with another business to destroy documents, the business’s “due diligence” could include reviewing an independent audit of the disposal company's operations and/or its compliance with this rule, obtaining information about the disposal company from references or reliable sources, requiring that the disposal company be certified by a recognized trade association or similar third party, reviewing and evaluating the disposal company's information security policies or procedures, or taking other appropriate measures to determine the competency and integrity of the disposal company.
Adelante Document Destruction Services is a member of the National Association for Information Destruction (NAID) and we are the only shredding business working in compliance with ISO 9001:2000 standards. We have the ‘external proof’ and security procedures already in place for FACTA.
How Can You Make Sure You’ll be in Compliance with FACTA?
Contact Adelante Document Destruction Services today to get a free security consultation.
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