Count the whys of shredding documents

By Don Sonck
Nov 01, 2010

Be it at home or at work, the flow of paper we create and receive continues to flow even in this ever-expanding digital world. The practice of arbitrarily tossing documents that contain any reference to professional or personal information simply in the trash is long extinct — or is it? A self-examination of your business practices in the area of document destruction is critical to ensure the reputation of your brand and customer trust; not to mention, federal law mandates it!

Let’s go back a few years for the main reason behind the best practice of document shredding. In 2003, Congress passed The Fair and Accurate Credit Transactions Act (“FACTA”). Under FACTA, certain federal agencies were required to create regulations designed to minimize the risk of identity theft and consumer fraud by enforcing the proper destruction of consumer information.

One of the resulting regulations, known as The Disposal Rule, states that “any person who maintains or otherwise possesses consumer information for a business purpose” is required to dispose of the information by “taking reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal.”

What is the definition of “Reasonable Measures”?

Disposal rule compliance can’t be achieved by relying on a personal shredder under a desk. Nor can your janitorial staff, nor can your landlord be relied upon to properly destroy critical data. Here is the primary example that the Federal Trade Commission (which issued The Disposal Rule) has given for paper destruction techniques that would constitute “reasonable measures” taken to protect against unauthorized access or use of consumer information: “Burning, pulverizing, or shredding of information”

The costs of non-compliance with FACTA and The Disposal Rule are many and can negatively affect virtually every business. Consider the damage to your firm as a result of a breach of consumer information:

~ Irreparable harm to your company’s reputation

~ Loss of revenue, market share, and customers

~ Significant fines

~ Expensive litigation that drains capital, time, and productivity

Shredding means “green.” Aside from compliance mandates, shredded paper is re-cycled and used in a variety of forms, such a packaging and wood by-products. This practice save trees and eases and reduces carbon emissions. In addition, an effective records-retention program which includes consistent destruction practices will reduce storage and labor costs.

Shredding makes sense.