Federal trade commission disposal rule

On June 1, 2005, the Federal Trade Commission (FTC) created a new rule stating that individuals and businesses must dispose of consumer information properly.

Known as the disposal rule, it provides guidelines for the proper disposal of consumer information. The guidelines require that a reasonable method of disposal be established and followed to prevent the release of consumer information to unauthorized persons. Along with entities such as medical practices, banks, and government facilities, individuals who have obtained private information from renters, local contractors, and even nannies, must adhere to these guidelines.

Consumer information should be shredded or burned before disposal. Today, even inexpensive home paper shredders can turn documents into confetti. Not just paper, but electronic files on CDs and DVD files should be shredded before disposal. Computer hard drives should be erased. However, a PC file shredder is also recommended, since hard drives that have been erased and reformatted can sill be mined for private information and passwords with the help of special software. Before outsourcing your shredding to a private disposal company, you should review the company with due diligence.

The disposal rule is not only an FTC requirement. It is a good business practice. The loss of confidential information due to identity theft is as preventable as it is prevalent. Furthermore, protecting consumer data can prevent a lawsuit. If you have a small home business, buying a home paper shredder is a wise investment in the future of your business.

Federal Trade Commission Disposal Rule