FACTA 101
FACTA 101
The advent of the digital age has brought with it perils as well as possibilities. As technology increases, so does the possibility of losing one’s livelihood to an online thief. Despite technological advances, keeping yourself safe isn’t just exclusive to your digital identity; often, a criminal’s best chance at stealing your vital information simply involves getting his hands on the right piece of paper.
One way to combat identity theft is through credit monitoring, and that is why we have the Fair and Accurate Credit Transactions Act (FACTA) of 2003, a federal law passed as an amendment to the Fair Credit Reporting act, passed years earlier. Through FACTA, consumers may request a free credit report once a year from one of the three major consumer credit reporting agencies. FACTA also guards against identity theft by demanding the proper disposal of sensitive information, by means of deletion, document destruction and shredding.
Before laws such as FACTA, the Health Insurance Portability and Accountability Act, and the Gramm-Leach Bliley Financial Modernization Act, it was easy for identity thieves to obtain whatever they needed to duplicate your existence; social security numbers, bank account information, credit reports, just by sifting through the right trash can. Privacy rights organizations have cited improper disposal of documents as one of the leading factors in the rise of identity theft. Fortunately, FACTA contains a clause that specifically guards against such practices, making proper document destruction the responsibility of almost any organization bearing financial information.
The “Disposal Rule,” as it’s called, dictates that a wide range of both large and small organizations using consumer credit reports engage in proper document destruction practices. The Disposal Rule affects credit reporting companies and debt collectors, lenders, insurers, landlords, mortgage brokers and automobile dealers, attorneys, private investigators, and a wide range of entities who maintain consumer information.
As for the actual destruction, the Disposal Rule maintains that any business affected by FACTA must perform a due-diligence search for a document destruction contractor to dispose of the relevant materials.
A quality document destruction firm will simplify the document destruction process for its clients; financial record shredding is a delicate business regardless of the size of your company.
The rules outlined in FACTA have quite a bit in common with those outlined in HIPAA, which governs medical record shredding, and the Gramm-Leach Bliley Financial Modernization Act, which primarily affects attorneys and accountants. Such a broad spectrum of common regulations means that quality document shredding firms will be quick to adopt safe practices.
Legal Shred can assist your company with FACTA shredding services, maintaining a document disposal program that meets FACTA laws.