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Effective June 1, 2005: New FTC Consumer Information Disposal Regulations Could Expose Employers to Significant Liability

MSK Client Alert
May 2005

In 2003, Congress passed the Fair and Accurate Transactions Act of 2003 ("FACTA"). FACTA amended the federal Fair Credit Reporting Act ("FCRA") in several ways. FCRA and FACTA were enacted to protect the privacy of individuals, and imposed requirements on businesses, including employers, who obtain "consumer reports." The term "consumer reports" is broadly defined, and includes personal information bearing on (for example) the credit worthiness, reputation, and personal characteristics of employees where this information is used in hiring or in implementing other adverse actions.


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