Shred documents or identity? New law hopes to curb latter

For the more than 246,000 people in the United States who last year were victims of identity theft, they’d probably choose the latter.

The problem of identity theft is no secret; so much so that to shred or not to shred is no longer a question for businesses in northwest Arkansas and across the nation.

As of Wednesday, businesses became legally obligated to destroy hard copy and electronic format documentation containing personal identification according to the Fair and Accurate Credit Transactions Act of 2003. “FACT is clearly another piece of legislation which has become neces- sary because too many organizations were remiss in meeting their obligations to protect confidential information,” Rhonda Houser, principle owner and vice president of northwest Arkansas-based HR Factor, said.

Translation: Congress stepped in because the paper trails of so many financial lives looked like Swiss cheese after identity thieves secured personal information from insufficiently secure corporations.

Sweeping in like a shooting range target, here’s the closeup view of the damage done just in 2004. Identity theft: The problem

Being 49 th just ahead of Mississippi isn’t always bad.

In 2004, Arkansas had the second lowest reported rate for fraud complaints per 100,000 people according to Consumer Sentinel, the Federal Trade Commission complaint database.

Unfortunately, low rank for fraud cases didn’t always translate into a low rank in identity theft victims.

Texas, which ranked 41 st in fraud, soared to fourth on the identification theft list, while Georgia, just one notch above Texas in the fraud category, jumped to 11 in identification theft reports.

Arkansas experienced a more modest differential by placing 32 nd in reported ID theft cases, according to the Identity Theft Data Clearinghouse, a part of the Consumer Sentinal network and the sole national repository of identity theft complaints.

Nearly 1,400 Arkansans had their identity stolen in 2004 — 19 percent of whom reported that more than one type of fraud perpetrated in their name — and it truly is a statewide problem. Little Rock, with 258 victims, accounted for only 18 percent of the identity thefts. Second was Hot Springs with 53 cases, followed by Fort Smith with 37 and both Conway and Springdale with 36 each.

Last month, Cpl. Kelley Cradduck of the Rogers Police Department said Rogers Police investigated 30 cases of identity theft in 2004, The problem seemed to escalate in 2005. In the first four months of the year, Rogers Police have received 16 identity theft reports. “Right now, we are on track to break (last year’s number),” Cradduck said. Identity theft: The uses

Once stolen, how is an identity fraudulently used?

In Arkansas, 86 percent of the cases fall into one of four categories: Credit card fraud, bank fraud, phone or utilities fraud and other.

Accounting for 25 percent of the reported cases in Arkansas during 2004, credit card fraud is the most prevalent. Nationwide statistics indicate a pilfered identity will be used to set up a new credit card account more often than to access existing accounts.

For bank fraud — which accounted for 22 percent of identity theft in the state and includes fraud involving checking and savings accounts and electronic fund transfers — the opposite is true. Identity thieves are more apt to tap into existing accounts rather than create a new one.

Why would someone steal an identity to commit phone or utilities fraud? For the past three years, the answer has been mobile communication. Ten percent of all nationwide fraud committed with the use of another’s identity is attributed to creating a new wireless account. In Arkansas, phone or utilities fraud accounted for 18 percent of all reported cases of identity theft in 2004.

Then there’s the “other” category, which accounted for 21 percent of the state’s identity theft, nearly matching the nationwide percentage. While it includes subcategories in Internet, medical and insurance fraud among others, the bulk of the reports nationwide in this category remain lumped in an undefined miscellaneous-type subcategory that has grown since 2002 — an indication that creative uses for other people’s identities continue to be found.

And of course, these are just the four major areas. Identity thieves have also been known to obtain fraudulent home, auto and student loans, not to mention file fraudulent tax returns and acquire forged or issued driver’s licenses and Social Security cards. Local viewpoints

According to Houser, protecting confidential employee and customer information “has long been considered a best practice within the field of human resources and is generally considered a standard operating procedure for most organizations.”

The difference is now they are legally bound to do so by the FACT Act.

For places like the administrative offices of Benton County, the law’s affect won’t mean doing more than what they already do to protect the information they collect. “As long as anyone can remember, we have shredded any papers containing personal information concerning our employees, past and present, as well as applicants,” said Barbara Ludwig, Benton County human resource manager. “Everyone in our office has a personal shredder but we also contract with a shredding company for larger computer same.

” Shred everything, “Fitch said.” Don’t tear it up. Don’t burn it. Shred it. ”

Will making a paper shredder as ubiquitous in the office environment as a stapler stem the growth industry that is identity theft? Is the FACT Act enough?

Both Houser and Trent Evans, northwest Arkansas sales manager for on-site document destruction company Shred-It, think so.

” Conceivably this new piece of legislation will result in organizations becoming properly aware of their duty to restrict access to personal information, as well as appropriately destroying the data as required, “Houser said.

Evans expects his shredding business to pick up in the months following the FACT Act taking effect as the corporate world realizes their legal obliruns or when we clean out our older files.”

Cradduck routinely uses a personal shredder in his office, and his colleague, detective Kenny Fitch of the Rogers Police Department, in February implored others to do the gations, which would match a trend he observed following the implementation of the Health Insurance Portability and Accountability Act of 1996, more commonly known as HIPAA. “I think (the FACT Act) certainly can have an impact on identity theft,” Evans said. A personal reflection

The other day, I walked into a northwest Arkansas Arvest Bank branch to make a deposit in my checking account. I didn’t have the checkbook with me, so I had to use one of the standard deposit slips the bank makes available.

Because I didn’t remember my bank account number, the teller behind the desk asked for my Social Security number. This has happened in the past, and usually they just type it into their computer as I try to say it as discreetly as possible. But this time, the teller wrote it down on a blank piece of paper.

Once the transaction was complete, the sheet of paper with my Social Security number was resting under the teller’s hand, on her side of the counter. Before leaving, I asked that it be shredded. She assured me that it would be. Walking out of the bank, I thought about how much had changed since 1996 when I held a summer job at a theme park restaurant.

Behind the service counter where the burgers were wrapped, beyond the fryers where potatoes sizzled and past the nondescript manager’s office door was a clipboard hanging next to the walk-in freezer. It held the sign-out sheet for taking breaks, an attempt to keep the process organized and the restaurant full of help during the busy parts of the day. On the sheet, you were required to write down your name, times left and returned — and your Social Security number.

Inconceivable today, a clipboard full of Social Security numbers just hanging in a commercial kitchen’s back hallway, pages fluttering from the breeze generated from the opening and closing of the freezer door.

Needless to say, I never saw a shredder in that restaurant. There may have been one in the manager’s office, but I doubt it. I honestly don’t know what became of those sheets of paper when they were filled with names and numbers, and at the time I really didn’t care.

Today, everyone cares. And thanks to federal regulations that took effect Wednesday, businesses have to care too — or face the financial consequences.

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