FACTA – The fair and accurate credit transaction Act

I bet this is one most of you didn’t know about. I didn’t until Al’s Morning Meeting reader Elliot Weiler, Consumer Reporter at WBRE-TV, told me about it. The Fair and Accurate Credit Transactions Act (FACTA) got a lot of press some months ago because it gives you one free look at your credit report each year. But it also requires anybody who employs even one person to go much further to protect that employee’s information. The companies that make shredders are about to get a lot of business.

USA Today explained:

…There’s a law with a provision going into effect this summer that says if you employ even one person — a nanny, a yard man — and you have their personal information because you’re doing the right thing and paying Social Security taxes, you have to “destroy” the information before you throw it away.

You have to shred it or burn it or pulverize it.

Or you could get sued. Or fined. Or become part of a class-action lawsuit by enraged nannies whose personal information has somehow gotten out.

Bet you didn’t know that.

The shredder industry does, and it expects sales to go on a tear.

Shredders are going to become “a household requirement as much as a washer and dryer,” says Bob Johnson, executive director of the National Association for Information Destruction (NAID), a paper-shredding industry trade group.
<a href=”http://www.legalshred.com”>paper shredding services</a>

The story explains:

The Fair and Accurate Credit Transactions Act was passed in December 2003, but rules were written just recently on the disposal provision. The law requires the destruction — “shredding or burning” or “smashing or wiping” — of all paper or computer disks containing personal information “derived from a consumer report” before it is discarded.

That means that if you do a credit check on your nanny before you hire her — or you get private information from a nanny service that came originally from a credit report — you fall under the rules.

The disposal provision goes into effect June 1. By then, all businesses — whether employing one worker or 1 million — will have to join the shredding game.

“It’s going to have a very big upside for people selling small shredders,” says Johnson. “A lot of companies that did not comply in the past were the medium-and smaller-sized companies. They were busy running their business or felt they were flying below the radar screen. But now they’ll have to comply. Every employer is covered, even individuals.”

USA Today also said the personal/home shredder business has grown a lot recently.

Overall, the market for shredders, including big commercial machines that handle tons of paper at a time, is about $350 million a year, says Steven Jacober, president of the School, Home and Office Products Association in Dayton, Ohio.

Revenue has been growing in the low double digits every year, he says. The main fuel now is the home and consumer market. Revenue for personal shredders has grown 20 to 25 percent over the past three years, Jacober says.

…In addition, about 2,000 companies in North America do records destruction; about half of them do it as their primary business. That’s three times the number that existed five years ago, according to Johnson of NAID.

About 1,000 mobile units that can pull up to a business and shred paper are roaming the nation now. But many firms just contract with shredding companies that pick up the documents and take them to plants where huge “dump-and-run” shredders handle tons at a time.New Shredder Law June 1