It can apply only if the firm maintains customer information concerning fewer than 5,000 consumers, and it removes only four listed duties. Citation: 16 CFR 314.6.
Primary source: FTC Safeguards Rule business guidance
Does the under-5,000-consumer exemption apply to a collection agency?
Details
Collection agencies often exceed 5,000 consumers because placement inventories are large, even when headcount is small. If below the threshold, 16 CFR 314.6 remains a narrow exception. The firm should document the count method, because old files, leads, former customers, and retained records can matter.
Primary source: FTC Safeguards Rule business guidance.
FAQ
Does the under-5,000-consumer exemption apply to a collection agency?
It can apply only if the firm maintains customer information concerning fewer than 5,000 consumers, and it removes only four listed duties. Citation: 16 CFR 314.6.
What is the data-flow issue for a collection agency?
Consumer information arrives in placement files, skip-tracing tools, dialer and CRM systems, payment portals, call recordings, dispute documents, and creditor reporting. The WISP should track transfers back to clients and any vendors that receive account inventories.
Is this legal advice?
No. It is source-cited educational content for a template product, not legal advice.