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Broker Fined $35,000 for Dumping 230 Credit Reports

By Faye Mergel
Published: Friday, March 5th, 2010

A Las Vegas mortgage broker was fined $35,000 for improperly disposing at least 230 credit reports and other sensitive documents. The civil penalty will serve as a settlement to the FTC charges against the broker for failing to comply with the Commission’s Disposal Rule.

Broker Fined $35,000 for Dumping 230 Credit ReportsThe Federal Trade Commission (FTC) charged, Gregory Navone, of Las Vegas, NV., for dumping copies of 230 credit reports, driver’s licenses, mortgage applications, tax returns, credit cards, and bank statements in a dumpster that can easily be accessed by the public. Navone is also being fined for failure of the two companies he previously owned to provide ample security for the protection of clients, despite an earlier promise to do so.

The broker has violated the Fair Credit Reporting Act and FTC’s Disposal Rule for being unable to properly dispose of credit report information upon getting rid of previous mortgage applications. He also violated FTC rules for misrepresentations committed by his companies regarding their consumer protection practices.

According to the Fair Accurate Credit Transactions, any business that uses consumer credit report or information is required to adhere to the current disposal rules first introduced in June 2005. This rule requires businesses to dispose client information in a manner that prevents unauthorized access. Burning, shredding, or pulverizing documents containing consumer credit report information are some of the “reasonable” measures FTC suggests under this new disposal rule.

Businesses that cannot properly dispose consumer credit report information themselves are allowed by federal law to hire third-party companies that will destroy documents on their behalf. However, the rule adds that those companies or professionals must be accredited or certified by a trade organization. Navone is accused of not following these rules.

Aside from paying the $35,000 penalty, FTC also requires him to improve his consumer protection practices by employing a comprehensive program for securing personal information. This sanction also requires him to hire an independent, third-party professional who will review his security measures every year for the next 10 years to verify if they meet or exceed federal law requirements. Additionally, the Commission voted for the stipulation of the final order in the United States District Court of Nevada. The decision was unanimous at 4-0. The court stipulated the order on December 30, 2009.

Law specialists made it clear though that this stipulation does not mean admittance of guilt by a defendant. It is merely a settlement of the FTC charges he faces. It takes the force of law upon the signing of a judge.

Navone’s two previous companies were Nevada One Corporation and First Interstate Mortgage Corporation.

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