FACTA Disposal Rule Compliance - An Executive Guide  

In December, 2003, the federal government passed the Fair and Accurate Credit Transactions Act of 2003 (FACTA), a new law that affects various aspects of consumer credit. Under FACTA, certain federal agencies were required to create regulations designed to minimize the risk of identity theft and consumer fraud by enforcing the proper destruction of consumer information. One of the resulting regulations, known as the Disposal Rule, was issued by the Federal Trade Commission in November 2004. Identical rules adopted by the federal banking agencies and the Securities and Exchange Commission now apply to organizations regulated under their authority.

Effective June 1, 2005, the Disposal Rule states that “any person who maintains or otherwise possesses consumer information for a business purpose” is required to properly dispose of the information, whether in electronic or paper form, by “taking reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal.”

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