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The Federal Trade Commission oversees federal regulations concerning consumer rights, including enforcement of the Fair and Accurate Credit Transactions Act of 2003.
Purpose
The legislation was enacted to require all businesses to safeguard and eventually destroy records of sensitive consumer information in order to keep it from being stolen and used for identity-theft purposes.
Basic Requirements
The legislation requires all businesses to act in a reasonable and appropriate manner to safeguard personal information obtained from customers and employees.
Policy Handbooks
Companies must have written policies prepared that instruct employees on procedures for safeguarding sensitive information and documents, such as locking file cabinets that are not in use which contain consumer credit documents and password-protecting computer terminals.
"Red Flag" Rules
All companies must establish procedures that are intended to identify and detect any signs--"red flags"--that a consumer may be a victim of identity theft. These procedures must also instruct employees on how to handle "red flag" situations, such as unusual credit application documents or suspicious account activity.
Free Yearly Credit Report
The legislation gives every consumer the right to a free annual credit report to assist in detecting and preventing theft of his personal information.
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