Does your organization collect personal and private information from consumers? If you do, you’d better be handling that information properly. You need to be clear about who has access to this sensitive information. And equally important, you need to dispose of it properly. No one wants to risk their financial identity with an untrustworthy business. If the information is improperly handled, your reputation can suffer.
That’s where the “disposal rule” comes in.
The disposal rule is designed to reduce the risk of consumer fraud. Federal law requires any person who possesses information taken from consumer reports which is to be used for a business purpose to “properly dispose” of this information. If the information that was derived from these consumer reports is not disposed of properly, it could lead to things such as identity theft.
Any organization regulated by the FTC or the federal banking agencies (including the CFPB) must follow the disposal rule. This includes, for example, motor vehicle dealers, sales finance companies and lenders. Also, anyone who provides a service for hire to dispose of consumer information must follow the disposal rule, i.e., a third party disposal company.
Now that we know the “What” and the “Who,” the big question is “How?”
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Head’s Up: This infographic is an oversimplification of the disposal rule, and it’s not intended as legal advice. Consult your legal counsel for more detailed information.
The information above is an excerpt from a policy provided by one of our partners, Hudson Cook LLP. We work with them and other industry experts to make sure we are providing accurate and current information, and we manage that information in an online Compliance Management System. One of the benefits of using a Compliance Management System is that it houses all the policies and guidelines you need to be aware of for your industry so you don’t have to go hunting down information; it is simply at your fingertips.