Matter of FACTA - Credit Information Measure Will Impact Businesses and Individuals
June 21, 2005
Bacon & Wilson litigator, Robert S. Murphy, Jr., weighs in. It’s called FACTA, or the FACT Act — both shorter names for the Fair and Accurate Credit Transaction Act of 2003. It was passed, at the behest of the Federal Trade Commission, to address the proper and accurate reporting of consumer credit information and, in so doing, take the fight against identity theft to a higher level. Most of the bill’s provisions — including everything from free credit reports for consumers to the so-called truncating of credit card numbers so merchants or restaurant workers can’t access them — have already been put in place. But one added amendment to the measure will take effect June 1, and it could have implications for several business sectors, while also providing fresh opportunities for the emerging document destruction industry, and especially the growing number of shredding companies in the area. That provision, Sec. 682.3, refers to the “proper disposal of consumer information,” and both of those phrases have fairly specific yet still subjective definitions, said Robert Murphy, a partner with the Springfield law firm Bacon & Wilson. He told BusinessWest that ‘proposal disposal’ means implementing and following set policies on shredding, pulverizing, or incinerating documents and materials, while ‘consumer information’ means, for the most part, credit-application data. There is a certain amount of ambiguity to the terminology, said Murphy, noting quickly that companies, agencies, and individuals involved with taking credit applications — automobile dealers, mortgage brokers, landlords, government agencies, and the sellers of big-ticket retail items, among others — would be subject to the FACTA provision, as well as the potential for increased liability and cost of doing business that come with it. “At issue is a new level of obligation that businesses and individuals who come into the possession of consumer information have when it comes to the disposal of that information in a secure manner so that it doesn’t fall into the hands of people who shouldn’t have it,” said Murphy, noting that many business owners — and their legal representatives — are still trying to figure out...
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by: Robert S. Murphy Jr., Esquire
BusinessWest
June 13, 2005
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