Rev Up the Shredder: Companies Must Properly Dispose of Personal Information

Starting on June 1, 2005, taking out the trash will have a whole new meaning for employers and businesses. That is the day that the Federal Trade Commission’s new rule regarding the proper disposal of confidential consumer information goes into effect. The regulation was drafted pursuant to the Fair and Accurate Credit Transactions Act of 2003 (FACTA), and requires covered entities to take “reasonable measures” to keep “consumer information” out of the hands of those who are not authorized to see or use it. The law includes consumer information (or a compilation) in paper, electronic or other forms, but only if it is a consumer report or derived from a consumer report, as those terms are defined by the Fair Credit Reporting Act.