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Safeguard Rules

In an attempt to provide for better security and privacy of personal information, the Gramm-Leach-Bliley Act also requires financial institutions to set up new standards to protect the confidentiality and security of consumers' personal information to help aid in the battle against identity theft and fraud. Under the safeguard rules provisions of the Gramm-Leach-Bliley Act, every company that is “significantly engaged” in providing financial services or products to consumers must develop a written plan to secure the privacy of personal customer information. This section of the law applies not only to banks, brokerage houses, and insurance companies, but also credit reporting agencies, mortgage brokers, real estate appraisers, tax preparers, and even ordinary retailers that issue their own store credit cards. Specifically, the plan must note and assess the risks to consumers' personal information throughout each aspect of the company's activities. The company's present security systems must be evaluated and regularly updated to respond to changes inside and outside of the company.

Due to the fact that a company's employees with access to sensitive, personal information are an always present possible source of identity theft, companies are urged to pay particular attention to the references of employees being hired who will have access to such information. A proper safeguard plan also provides rules for locking areas and file cabinets where written records are stored, establishing and regularly changing computer passwords, and encrypting personal consumer information whenever possible.


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