Mortgage Broker Throws Consumer Credit Reports in Dumpster - Recieves $35,000 Civil Penalty

A mortgage broker, who was charged in December 2008 by the Federal Trade Commission (FTC) for throwing consumer's credit reports and other sensitive documents in a publicly-accessible dumpster, was ordered to pay a $35,000 civil penalty to settle the FTC charges.

The broker, Gregory Navone, was also ordered to employ 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.

The FTC charges alleged that two mortgage brokerage companies he previously owned, First Interstate Mortgage Corporation and Nevada One Corporation, failed to provide reasonable and appropriate security for sensitive consumer information, in violation of the Fair Credit Reporting Act and the FTC’s Disposal Rule. The complaint also charged him with violations of the FTC Act for his companies’ misrepresentations about their data security practices.

According to the FTC charges, Navone improperly disposed of about 40 boxes of consumer records collected by the two companies he owned. These sensitive consumer files included tax returns, mortgage applications, bank statements, photocopies of credit cards and driver's licenses, and at least 230 credit reports.

It would have been an identity thieve's dream-come-true if they would have found the consumer files before the local authorities had been notified by someone who noticed the sensitive documents in the trash dumpster behind the mortgage broker's office.

FTC Note: Stipulated final orders are for settlement purposes only and do not constitute an admission by the defendant of a law violation. Stipulated orders have the force of law when signed by the judge.


Source:
Federal Trade Commission