Feds: Shred those secrets

By James Fisher (Daily Times Staff Writer)
6/2/2005 – Ladies and gentlemen, start your shredders.

Businesses across the country may be scrambling this month to be ready to follow a new federal law that takes effect in June. To avoid a penalty, they’ll have to destroy any personal financial information about employees, potential hires and customers before throwing it away.

Grinding up or burning those documents would work, but by far the most popular method will be shredding, done by machines that take paper in and spit document spaghetti out.

“Basically, everyone’s buying shredders,” said Steve Martin, a salesman with Hunter Office Systems, which distributes on the Eastern Shore and in the mid-Atlantic. “Anybody who deals with credit, takes credit slips, takes credit cards, they’ve got to shred.”

The Fair and Accurate Credit Transactions Act, passed in December 2003, told the Federal Trade Commission to make a rule about the disposal of sensitive financial information. That rule was made late last year, and is set to take effect June 1.

The law is designed to prevent identity theft, the FTC says, and requires businesses, even the smallest ones, “to take reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal.”

The rule says that “shredding or burning paper records containing consumer information will generally be appropriate.” With computer discs or hard drives about to be thrown away, the FTC suggests “smashing the material with a hammer.”

Individuals who obtain financial information about others, for example about nannies they intend to hire, would also be required to destroy that information before tossing it.

The National Association for Information Destruction, an Arizona-based group, tracked the rule’s development and touted the move in news releases as a victory for the industry, as well as a smart business practice.

Shredders are available at office supply stores, and through some copy and fax machine dealers. Janice Jones, with Callaway Office Equipment Co. in Salisbury, said that store carries several lines of shredders — one that takes up to 32 linear feet of paper per minute — and also offers service for any machine they sell. The shredders offer different “security levels” of cuts, with the most jagged patterns considered the safest.

Martin said Hunter Office System’s largest model, at $21,000, is usually sold to hospitals. “It shreds cups, glasses, soda cans, bottles, you name it.” Smaller models that will stand up to frequent use start at around $500, he said.

Locally, real estate offices and financial institutions seem to be the early adapters. Tracy Davis, with Berlin’s Ashore Realty, said shredders are the norm there.

“You pretty much have to now,” she said. “I’ve been here for four years, and we’ve always had shredders.”

Richard Malone, an assistant public works director for Ocean City, said about 5 percent to 10 percent of the paper that the town recycles is pre-shredded.

“We’ve got two accountant’s offices. They shred everything. The banks shred everything,” Malone said. “The real estate people are starting to produce some shredded paper, but they produce an ungodly amount of paper, and they don’t shred it all.”

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