The Federal Trade Commission (FTC) has announced a settlement with Northbrook, Illinois-based American United Mortgage Company over a Fair and Accurate Credit Transaction Act (FACTA) disposal rule violation. American United Mortgage threw credit reports of their customers into an un-secured dumpster. The company has agreed to pay a fine of $50,000.
According to the FTC complaint American United Mortgage was found to have thrown credit reports in March of 2006. The company was notified in writing about the violation. In at least two subsequent investigations, the company continued to throw out credit reports in the same dumpster.
Two things strike me about this story. Why does it take three violations before the FTC decides to protect consumers information? American United is very bad at math. If the had hired a shredding service they would have paid a few hundred dollars. If they would have shredded in-house they would have paid a few thousand dollars in labor and shredders. But now they are paying fifty thousand dollars in fines. Just not good business sense.
According to the FTC complaint American United Mortgage was found to have thrown credit reports in March of 2006. The company was notified in writing about the violation. In at least two subsequent investigations, the company continued to throw out credit reports in the same dumpster.
Two things strike me about this story. Why does it take three violations before the FTC decides to protect consumers information? American United is very bad at math. If the had hired a shredding service they would have paid a few hundred dollars. If they would have shredded in-house they would have paid a few thousand dollars in labor and shredders. But now they are paying fifty thousand dollars in fines. Just not good business sense.
Labels: facta disposal rule
