Law demands companies step up data shredding

Law demands companies step up data shredding

Alana Roberts / Staff Writer (In business Las Vega
6/19/2005 – A new law that dictates that employers must destroy individuals’ personal consumer information has some local companies putting new policies in place and others turning to shredding services to comply.

Meanwhile, others say they’ve always been careful with the way they discard personal information.

The disposal provision of the Fair and Accurate Credit Transactions Act of 2003 went into effect on June 1. That provision requires companies that gather consumer reports or use information from consumer reports to dispose of the information by either shredding, burning or pulverizing it. Examples of consumer reports include credit reports, credit scores, employment background reports, check writing history, insurance claims, residential or tenant history or medical history.

“We just enforced a new company policy so we comply with the new law,” said Dawn Hathaway Thoman, vice president of Manpower Inc. of Southern Nevada. “We as staffing firms receive a lot of personal information (from) our applicants. We have Social Security numbers and phone numbers. What we’ve done is provide a shredder for all of our offices. What we’re doing is asking all of our people to shred all documents that contain sensitive or confidential information.”

Katherine Armstrong, a lawyer for the Federal Trade Commission, said the law doesn’t dictate when the information is to be destroyed, only that when a company destroys the information they dispose of it properly. She said many companies already properly dispose sensitive information.

“The goal is to attempt to prohibit the kind of harm that can occur when this kind of sensitive information is disposed of improperly,” Armstrong said.

Hathaway Thoman said the company has policies about when documents such as resumes and applications are to be discarded. She said the company discards applications three years after the termination date or if the application isn’t processed three years after the application is filed. She said the company administers checks such as background checks, credit checks and educational background checks upon request.

Hathaway Thoman said that when the company performs background checks for a customer the company keeps that information five years from the termination date, as well as drug-test results. She said proper disposal of personal information just reinforces the confidence a jobseeker will have in the company’s services.

“The worst thing for a candidate to have happen is have their application blowing down the street,” Hathaway Thoman said.

The law also amends a provision in the Fair Credit Reporting Act, by clarifying the duties of employers when they use a third party to investigate employee misconduct. Before the clarification employers would need to notify an employee that is accused of misconduct before going ahead with an investigation led by a third party. Now that is no longer the case, Armstrong said.

Cornelius Eason, president of the Nevada Staffing Association and Priority Staffing USA, said many staffing firms and other employers already discard personal information carefully.

“It’s kind of business as usual for us,” Eason said. “We’re in the business of collecting personal information about thousands of employees. For them to have confidence in us (we) have to have protections for their information.”

Other companies and entities that are also covered by the law are landlords, government agencies, lenders, insurers, debt collectors, lawyers, mortgage brokers, car dealers and private investigators. Individuals can also be subject to the law if they access consumer information from a consumer reporting company for someone who performs work such as a contractor or a nanny.

The nonprofit Opportunity Village provides document destruction services. Laura D’Amore, sales and marketing manager of Opportunity Village, said the facility saw a 10 percent increase in its document-destruction business since the law passed earlier this month. However, she said it’ll take a high-profile event such as a lawsuit to bring it to every company’s attention.

“I know it was a contributing factor to four contracts we closed (Monday),” D’Amore said. “It’s a progressive thing. Not every company is hip on FACTA at this point. I can guarantee you (when) the first class-action lawsuit (is filed) is when every single company in this valley is going to become much more aware of FACTA.”

Alana Roberts covers courts and labor relations for In Business Las Vegas and its sister publication, the Las Vegas Sun. She can be reached by e-mail at or at (702) 259-4059.

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