The major reasons are security and privacy. Today, many organizations are required to comply with new legislation affecting healthcare and financial institutions.

HIPAA

The Health Insurance Portability and Accountability Act (HIPAA) was passed in 1996. HIPAA  defines requirements for access to and storing of patient information.  It is designed to protect confidential information through improved security standards and federal legislation. Health plan and healthcare providers were required to be in compliance by April 14, 2003.  For more information, go online to http://www.hhs.gov/ocr/hipaa.

GLB

The Gramm Leach Bliley Act (GLB) was signed in 1999 and ensures that “financial institutions” respect the privacy of their customers and protect the security and confidentiality of consumer financial information (nonpublic personal information) collected when an individual obtains a “financial product or service.”  The FTC chose to retain a broad definition of “financial institution,” “nonpublic personal information,” and “financial product or service.”  For example, the definition of financial institution encompasses retail sellers of goods if they assist consumers in obtaining credit or extend credit themselves (automobile dealerships for example). Financial institutions were required to be in compliance by July 1, 2001.  For more information, go online to http://www.senate.gov/~banking/conf/ or http://www.sec.gov/rules/final/34-42974.htm.

FACTA

FACTA (or FACT Act) is the Fair and Accurate Credit Transation Act, a brand new federal law designed to reduce the risk of consumer fraud and identity theft created by improper disposal of consumer information.  FACTA applies to virtually every person and business in the United States. FACTA requires that “any person who maintains or otherwise possesses consumer information for a business purpose” must properly destroy discarded consumer information by taking reasonable measures to protect against unauthorized  access to or use of the information in connection with its disposal.