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Do the FTC Disposal Rules Apply to You?

Tips to Remain Compliant: Professional Shredding and Document Destruction  

No matter how large or small your business, and what industry you belong to, chances are that at some point of time you use or manage data or information that comes from a consumer report agency. Whether it is credit reports of your customers, or background checks on your employees, any information derived from these reports falls under the purview of the Federal Trade Commission’s (FTC) Disposal Rule. Passed in June 2005 with the objective of safeguarding the privacy of consumers, this rule covers the safe disposal of consumer reports in all formats. 

At TITAN Mobile Shredding, we are NAID AAA Certified and our data destruction specialists have a deep understanding of the requirements pertaining to the various privacy laws. This includes not just the Disposal Rule, but also HIPAA, FACTA, and other industry-specific regulations. Read on to know more about FTC Disposal Rules and how they could impact you as an individual or business.

Everything You Should Know about the Disposal Rule

What Reports Does the Rule Cover?  The rule requires proper disposal of the actual digital and physical consumer reports, as well as any information derived from such reports. The information in these reports is confidential and sensitive as it pertains to the consumer’s eligibility for employment, loan, credit, insurance or other such purposes. If opportunistic criminals manage to access this data, they can easily carry out identity theft, fraud and various other scams. Hence, the objective of the rule is to create a stronger protection mechanism and prevent this information from falling into the wrong hands. 

The reports that would typically fall into this category include, credit reports, credit scores, employment background checks, insurance claims, medical history, residential or tenant history, and check writing history.

Who Must Mandatorily Comply? Broadly, the rule applies to any individual or business that accesses or manages information from any type of consumer report. However, compliance with the Disposal Rule is mandatory for:

  • Consumer reporting companies
  • Lenders, debt collectors, insurers, mortgage brokers and automobile dealers
  • Government agencies
  • Attorneys or private investigators
  • Employers who obtain background checks on prospective employees
  • Landlords who obtain credit reports on prospective tenants
  • Individuals who obtain a credit report on prospective nannies
  • Businesses that maintain information in consumer reports and provide it to other organizations covered by the Rule
  • Companies, specifically financial institutions that are subject to the Gramm-Leach-Bliley Act (GLBA)

What is the Recommended Disposal Method?

The Disposal Rule does not actually state the methodology for safe destruction of physical or digital data. It requires every individual or business to adopt practices that are reasonable and appropriate to prevent unauthorized access to or use of information from the consumer report. However, common best practices that you can follow to remain compliant with this rule are:

  • Shred all physical documents containing consumer information, so that the same cannot be read or reconstructed.
  • Destroy all digital data, including files, hard drives and thumb drives, so that the information cannot be forcibly accessed or retrieved by unauthorized parties. 
  • Conduct due diligence when you hire professional document destructors. This includes a review of their references, their certifications and their information security policies and procedures.
  • Set up an independent audit to review the effectiveness of your internal disposal operations, as well as the contracted company’s compliance with the Disposal Rule.

To remain compliant with the various disposal requirements pertaining to your industry, rely on a professional company such as TITAN Mobile Shredding. With extensive knowledge and comprehensive tools, we can help ensure that you do not violate any rules. Our endeavor is to significantly reduce your risk of fines or lawsuits. Take advantage of our numerous services, including on-site shredding and mobile hard drive destruction. 

To know more about how to comply with the FTC Disposal Rule, call TITAN Mobile Shredding at (866) 848-2699 or contact us online for a free quote. Our data destruction professionals are eager to help you.

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