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FTC Charges Mortgage Broker with Violation of Federal Data Security Laws

On January 21, 2009 the Federal Trade Commission reported it charged a mortgage broker with violation of federal data security laws. The FTC stated in December, 2006 approximately 40 boxes of consumer records were discovered in an unsecure dumpster. Records included tax returns, credit reports, mortgage applications, bank statements and photocopies of credit cards and state id’s.

Gregory Navone of Las Vegas is charged with violating the Fair Credit Reporting Act and the rule regarding Disposal of Consumer Report Information and Records. The FTC’s complaint alleges that Navone failed to implement and monitor policies and procedures requiring secure disposal of consumer information. According to the FTC, the defendant failed to implement reasonable physical and electronic data security measures, secure collection, handling, and disposal of such information as well as employee training. The defendant also failed to provide security measures in key areas involving the physical and electronic security of sensitive consumer information; the proper collection, handling, and disposal of such information; and employee training. The defendant also failed to provide proper contracting for the handling of the information by secure service providers.

The Federal Trade Commission filed the complaint in the U.S. District Court for the District of Nevada on December 30, 2008.

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