Under the Fair and Accurate Credit Transactions Act (FACTA), what is the most appropriate action for a car dealer holding a paper folder of customer credit reports?

Under the Fair and Accurate Credit Transactions Act (FACTA), what is the most appropriate action for a car dealer holding a paper folder of customer credit reports?
A . To follow the Disposal Rule by having the reports shredded
B . To follow the Red Flags Rule by mailing the reports to customers
C . To follow the Privacy Rule by notifying customers that the reports are being stored
D . To follow the Safeguards Rule by transferring the reports to a secure electronic file

View Answer

Answer: A

Explanation:

"The Disposal Rule requires any individual or entity that uses a consumer report, or information derived from a consumer report, for a business purpose to dispose of that consumer information in a way that prevents unauthorized access and misuse of the data. Consumer reports can be electronic or written. The rule applies to both small and large organizations, including consumer reporting agencies, lenders, employers, insurers, landlords, car dealers, attorneys, debt collectors, and government agencies." and "Examples of acceptable, reasonable measures include developing and complying with policies to: Burn, pulverize or shred papers containing consumer report information so that the information cannot be read or reconstructed Destroy or erase electronic files or media containing consumer report information so that the information cannot be read or reconstructed Conduct due diligence and hire a document destruction contractor to dispose of material specifically identified as consumer report information consistent with the rule"