News
November 29, 2004
FTC Issues Document Destruction Rule to Combat Identity Theft and Protect Consumers’ Privacy
Businesses Will Be Required To Properly Dispose of Sensitive Consumer Information
SAINT PAUL,MINNESOTA — The Federal Trade Commission (FTC) has issued a new rule that will require local Twin Cities businesses to properly dispose of and destroy sensitive consumer data. The rule is one of several new requirements intended to combat consumer fraud and identity theft and protect privacy required by the federal Fair and Accurate Credit Transactions Act (FACT Act) which was enacted in December 2003.
The new FACT Act Disposal Rule, issued on Thursday, broadly covers "any record about an individual, whether in paper, electronic, or other form that is a consumer report (also known as a credit report) or is derived from a consumer report.” It requires any person or company that possesses or maintains such information to take “reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal."
"There is no reason that a stack of customer files containing credit reports should be sitting in a dumpster in the Twin Cities, easily accessible to just about anyone," said Ron Mason, owner of Shred Right, Inc. a local document destruction company with over 20 years of shredding experience. "This rule will require banks, retailers, auto dealers and any other business throughout our region that obtain credit reports, or related personal information, to shred those documents before throwing them away."
“And it’s not just paper,” Mason continued. “Information is being stored and stolen from discarded computers. The only sure way of insuring that information does not fall into the wrong hands in complete and secure destruction.”
According to a study released by the FTC in September 2003, nearly 10 million Americans were the victims of identity theft in the previous year alone. The study also found thatU.S.businesses lost $47 billion and consumers lost approximately $5 billion as a result of identity theft during the same period.
"This new rule is an important step forward in the fight against consumer fraud and identity theft. Shredding documents and properly destroying computer files and hard drives will help ensure that records containing sensitive personal and financial information don’t fall into the wrong hands," said Robert Johnson, executive director of the National Association for Information Destruction (NAID). "It’s important for the business community to understand that this law applies to nearly every business and private employer in theU.S."
The new rule provides examples of how to comply with the new requirements, including:
• Implementing and monitoring compliance with policies and procedures that require shredding or other forms of destruction of documents and electronic media containing consumer information; and
• Contracting with a third party to properly dispose of consumer information and monitoring their performance..
The FACT Act Disposal Rule applies to virtually every business and private employer in the U.S.The rule requires these businesses to come into compliance by June 1, 2005 by both adopting and implementing their own document destruction policies or by contracting with a document shredding company or other data destruction company to do so. Penalties for violating the rule include actual damages, statutory damages up to $1,000 punitive damagesper violation(with no cap on class action damages), attorneys’ fees, and civil penalties up to $2,500. For more information about the rule and business compliance requirements, visit the FTC web site at www.ftc.gov.
About NAID
The National Association for Information Destruction(NAID) is the international trade association for companies providing information destruction services. Suppliers of products, equipment and services to destruction companies are also eligible for membership. NAID's mission is to promote the information destruction industry and the standards and ethics of its member companies. For more information, visit www.naidonline.org.
About Shred Right, Inc.
Shred Right, located inSt. Paul,Minnesota, has been providing secure complete shredding solutions for any size business for over 20 years. Their high-security facility exceeds the rigorous AAA-standards established by the National Association for Information Destruction (NAID) quality certification program. Shred Right shredding operations render all material legallynon-negotiableand indecipherable with a Double Destruction Guarantee, backed with a $1 million blanket dishonesty bond and a $1 million errors and omissions insurance policy. Shred Right is a privately held company located at862 Hersey Street,St. Paul,MN 55144.
EDITOR’S NOTE: To receive more information or to set up an interview with a Shred Right, Inc., executive, contact Jim Beran at 651-647-1300 or email jim@rohnind.com.
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