FACTA - You're Never too Small to Shred
Tina Anderson, like many other working moms, has a full-time nanny. She found her employee
via a qualified search firm, and maintains records on her like the information discovered during a
background check, her social security number, and other documents relating to her employment.
Beginning this summer, Anderson -- and all small business owners -- is going to be legally
responsible for protecting her nanny's personal information. She'll have to "destroy" it before
throwing it away. If she doesn't she'll be in violation of the Fair and Accurate Credit Transactions
Act (FACTA). By not shredding this sensitive information, Leonard could face a fine or potentially
a law suit.
"I had no idea that we'd subject ourselves to FACTA," Anderson says from her home
in Lakewood, Colorado. "I'll have to figure out what type of shredding options are available to
Steve Hastert, vice president of DataGuard USA, is in the business of solving this problem for
Leonard and the thousands of small business owners like her. Hastert runs the
Shred Nations web site that provides shredding services to businesses and consumers.
In fact, one of DataGuard's most popular services provides for home and office pick up and
destruction of these sensitive documents by local shredders.
The service, called "Express Shredding" allows Leonard to package up to 30 pounds of documents in
a cardboard box. Using the web site, she can order a FedEx pickup of the
documents from her home or office. The box is then delivered to a certified shredder. Once it is
shredded, customers get an official document of destruction.
"It's a simple, guaranteed solution for small business owners," explains Hastert. "We offer the
benefit of a certified shredding service so that business owners can prove that they shredded the
sensitive documents. A home-office shredder is not only more expensive but it can't offer that
level of protection."
Geri Smith, of the Women's Economic Development Council, says this is a serious issue facing
small business owners. "Most people think of shredding documents as a caution they should
perform for protecting information from about their business from competitors. And that's a
discretionary function. It's a new twist to be "required" to shred sensitive information."
In her opinion, though, FACTA is justified, especially when you consider what companies
keep in a personnel file Among other facts, a thief would find the employee's name, address,
date of birth, job title and description, rate of pay and any other compensation paid, starting date
and a résumé. If the employee has direct deposit, the file would also contain bank account
information. "It certainly would be a gold mine," she says.
The FACTA legislation is directly tied to the explosive growth in identity theft over the past five
years. 9.3 million people had their identities stolen in 2004 alone, according to a study by the Better
Business Bureau "Victims now spend an average of 600 hours recovering from this crime, often
over a period of years," says Linda Foley, executive director of the Identity Theft Resource Group. "Three years ago the average was 175 hours of time*, representing an increase of about 247%."
According to a January 2005 report by Better Business Bureau, 10% of all identity theft is the
result of information stolen by employees.
Hastert hopes that the new FACTA law will encourage small and medium business owners to
take the steps necessary to protect their employee's identity. "Every day I hear new
stories about individuals who are identity theft victims because their employers didn't protect
their sensitive data," he says. "Now employers' are legally accountable for protecting their
employees' and customers' personal information." The Better Business Bureau reports that 8.7% of identity thefts are committed by corrupt employees.