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Question 84 - CIPP-US discussion

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How did the Fair and Accurate Credit Transactions Act (FACTA) amend the Fair Credit Reporting Act (FCRA)?

A.

It expanded the definition of ''consumer reports'' to include communications relating to employee investigations

Answers
A.

It expanded the definition of ''consumer reports'' to include communications relating to employee investigations

B.

It increased the obligation of organizations to dispose of consumer data in ways that prevent unauthorized access

Answers
B.

It increased the obligation of organizations to dispose of consumer data in ways that prevent unauthorized access

C.

It stipulated the purpose of obtaining a consumer report can only be for a review of the employee's credit worthiness

Answers
C.

It stipulated the purpose of obtaining a consumer report can only be for a review of the employee's credit worthiness

D.

It required employers to get an employee's consent in advance of requesting a consumer report for internal investigation purposes

Answers
D.

It required employers to get an employee's consent in advance of requesting a consumer report for internal investigation purposes

Suggested answer: B

Explanation:

FACTA added a new section to the FCRA that requires any person who maintains or otherwise possesses consumer information, or any compilation of consumer information, derived from consumer reports for a business purpose, to properly dispose of any such information or compilation. The purpose of this provision is to reduce the risk of identity theft and other consumer harm resulting from improper disposal of consumer information. The FTC and other federal agencies have issued rules implementing this provision, which specify the reasonable measures that covered entities must take to ensure secure disposal of consumer information, such as burning, pulverizing, shredding, erasing, or otherwise modifying the information to make it unreadable or indecipherable (16 CFR 682.3).Reference:1,2,3

asked 22/11/2024
Velli Mutham
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