A mortgage broker who allegedly dumped 40 boxes of consumers’ financial records into a public trash bin paid a $35,000 civil penalty to settle Federal Trade Commission charges that he violated the Fair Credit Reporting Act, the FTC's Bureau of Consumer Protection office said today.
Gregory Navone of Las Vegas and the two mortgage brokerage companies he owned - First Interstate Mortgage Corp. and Nevada One Corp. - were charged in the FTC's December 2008 complaint with improperly disposing of at least 230 credit reports and other "sensitive consumer records" collected by the firms. Navone did not immediately respond to a request for comment.
The FTC specifically charged Navone with failing to take reasonable measures to protect credit report information from unauthorized access – a violation of the Fair Credit Reporting Act and the FTC’s Disposal Rule. The complaint also charged him with violating the FTC Act for misrepresenting his firms’ data security practices. Other consumer records left in the dumpster included tax returns, mortgage applications, bank statements, photocopies of credit cards and drivers’ licenses, according to the FTC.
The settlement bars Navone from misrepresenting measures taken to protect sensitive consumer information and failing to take reasonable measures to protect credit report information during the disposal.
The settlement requires him to adopt a “comprehensive information security program for sensitive consumer information, and to hire an independent, third-party security professional to review the program every year for 10 years to ensure that it meets or exceeds the order’s requirements."