DOCUMENT SHREDDING AND OTHER SAFEGUARDS REQUIRED
As far as office equipment goes, real estate offices first couldn’t do without the telephone, and then it was the fax machine, the computer, and now . . . the paper shredder.  Beginning June 1, 2005, federal law will require the proper storage and disposal of consumer credit reports and related information.  This rule aims to protect consumers from “dumpster diving” by identity thieves.  The rule is part of the Fair and Accurate Credit Transactions Act of 2003 or FACTA which generally aims to prevent consumer fraud.

This new federal law merely serves as a reminder that REALTORS® must currently comply with even stricter California law for handling customer records.  Under existing California law, a business must generally take all reasonable steps when destroying customer records containing “personal information” by shredding, erasing, or otherwise modifying the personal information to make it unreadable or undecipherable through any means.  Whereas the new federal law only pertains to credit reports, California law broadly defines “personal information” as any information that identifies, relates to, describes, or is capable of being associated with, a particular person.  This California law, which came into effect on January 1, 2001, is set forth at California Civil Code sections 1798.80 and 1798.81.

California law also generally requires a business to implement and maintain reasonable security procedures and practices to protect from unauthorized access certain personal information of a more sensitive nature (such as social security numbers, driver’s license numbers, and account numbers).  If a business discloses this type of personal information pursuant to a contract with a nonaffiliated third party, the business must require by contract that the third party also implements and maintains reasonable security procedures and practices.  This law, which came into effect on January 1, 2005, is fully set forth at California Civil Code section 1798.81.5.

For more information, C.A.R. members may contact C.A.R.’s Member Legal Hotline at 213.739.8282, or for office managers, broker/owners, and designated REALTORS®, call 213.739.8350.  Access to Member Legal Hotline is also available through C.A.R. Online at http://www.car.org/index.php?id=NTk2.

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