Consumers often go to great lengths to protect their financial data. This includes encoding credit and debit cards with PINs, and online accounts with password protections. Despite this, many third-party financial institutions have been rather casual about protecting the information of their customers.
However, due to a recent ruling by the Federal Trade Commission (FTC), credit report resellers will now have to take additional precautions to ensure that a consumers vital financial data doesnt fall into the wrong hands.
Under the terms of the agreement, three credit report resellers, which purchase credit reports and then combine them with additional information for mortgage lenders, will be required to strengthen their security procedures and undergo mandatory security audits for the next two decades.
These cases should send a strong message that companies giving their clients online access to sensitive consumer information must have reasonable procedures to secure it, David Vladeck, director of the FTCs Bureau of Consumer Protection, said in a statement.
Consumers can take added precautions themselves. Checking their credit reports frequently, for instance, can help them detect signs of unauthorized purchases in a timely fashion and allow them to address any errors or signs of fraud before they do significant, ongoing damage to their credit scores.