Regulatory Update from ChoicePoint

May 20, 2005

Notice Type:
Federal Trade Commission (FTC) Notice

New Rule:
On June 1, 2005, the FTC will impose a new rule requiring all businesses and organizations maintaining or possessing consumer report information to properly dispose of consumer report information. The rule’s purpose is to reduce the risk of consumer fraud and identity theft created by improper disposal of consumer information. 

Date of Change:
June 1, 2005

Description of New Requirement:
The rule applies to all businesses and organizations that maintain or possess consumer report information and records in connection with (1) credit transactions, (2) employment purposes, (3) the underwriting of insurance, (4) the valuation or assessment of the credit or prepayment risks associated with an existing credit obligation, or (5) other legitimate business needs.

The rule defines “consumer information” as any record about an individual, whether in paper, electronic or other form that is a consumer report or derived from a consumer report. “Disposal” is defined as the discarding or abandonment of consumer information or the sale, donation or transfer of any medium, including computer equipment, upon which consumer information is stored.

According to the FTC, a consumer report consists of information obtained by a Consumer Reporting Agency, such as ChoicePoint, and contains information regarding an individual’s personal and credit characteristics, character, general reputation and lifestyle. Examples of consumer report information are credit checks, Motor Vehicle Reports, and criminal background checks.

Requested Action:
All businesses and organizations that use consumer report information are impacted by this rule. The FTC rule requires them to perform an independent review of all internal policies and procedures regarding the disposal of consumer report information. The rules does not require disposal, it only addresses what businesses should do if they choose to dispose of the information.

Under the rule, affected businesses and organizations must use reasonable measures to protect against unauthorized access to or use of the consumer information, both during and after the disposal process. Reasonable measures are determined by the sensitivity of the consumer information, the nature and size of the entity’s operations, the costs and benefits of different disposal methods and relevant technological changes.

ChoicePoint Commitment:
Just as this rule may require compliance by organizations such as yours, it also applies to ChoicePoint. We are taking all reasonable measures to comply with the rule to ensure proper disposal of consumer report information.

Since you are a valued ChoicePoint customer, we want to ensure that you are aware of this new rule and its impact all businesses and organizations using consumer report information.

For More Information:
· Questions about the new rule, please visit the FTC Web site at www.ftc.gov, or contact the FTC Division of Financial Practices, Bureau of Consumer Protection at (202) 326-3224.
· Questions or comments for ChoicePoint, please contact your Account Representative.