What Is the Facta Disposal Rule?



Enacted in 2003, the Fair and Accurate Credit Transaction Act, or FACTA, is an amendment to the Fair Crediting Reporting Act. FACTA was added to protect consumers from identity theft by providing rules on how their information should be shared and destroyed.

One of the most important parts of FACTA is the disposal rule. This rule requires businesses and individuals to take appropriate measures to dispose of sensitive information about consumers.

The FACTA disposal rule applies to everyone, regardless of business size, so it’s important to make sure you’re compliant with FACTA. If you aren’t, you are breaking the law.

What is the FACTA Disposal Rule?

The FACTA disposal rule requires businesses to take “reasonable measures” to protect against unauthorized access to or use of consumers’ information.

According to the FTC, burning, pulverizing, and shredding are all considered reasonable measures under the disposal rule.

The disposal rule is designed to be flexible, allowing anyone affected by the rule to choose which measures are “reasonable” based on the costs and benefits of different disposal methods.

If you can’t shred the consumer information yourself, the disposal rule also allows the use of document destruction contractors.

FACTA Non-Compliance Penalties

There are severe legal penalties for failing to comply with the FACTA disposal rule. The statutory damages may even be assessed without any actual injury to the customer.

Depending on how many violations there are, the cost can quickly add up into hundreds of thousands or even millions of dollars.

Type of Liability FACTA Penalties
Civil Liability
  • Actual damages (these can be very large if the violation leads to identity theft)
  • Statutory damages up to $1,000 per customer affected
Class Action Lawsuit
  • Damage claims in the millions or billions of dollars depending on the scale of the violation
  • Punitive damages
  • Attorneys’ Fees
Federal Penalties
  • Up to $2,500 for every violation
State Penalties
  • Up to $1,000 for every violation that affects the state’s residents

How to Ensure FACTA Compliance

The best way to make sure you are complying with FACTA is to have your documents shredded. There are several options when it comes to choosing a secure shredding service.

Though the price varies between services, using a secure shredding service will cost much less than paying up for violating the FACTA disposal rule.

1. Mobile ShreddingMobile Shredding Comes to You

Mobile shredding is a convenient way to handle the destruction of your important documents.

For about $100 for up to 300 pounds (around 3-10 copy paper boxes), a mobile shredding truck can be scheduled to come to your location.

2. Off-Site Shredding

Off-site shredding is best if you have more than 300 pounds of paper to shred. Like with mobile shredding, an off-site shredding service can be scheduled to come pick up your paper. From there, it will be taken to a secure shredding facility and destroyed.

The cost of off-site shredding depends on your location and which provider you choose.

3. Drop-Off Shredding

If you don’t have as much to shred, or you don’t need to schedule a pickup or mobile shredding, drop-off shredding is a great option. For an average of $1 per pound, you can drop off your documents at a retail location, where they will be shredded.

4. Ship ‘N’ ShredShip 'n' Shred services come to you

With Shred Nations, you can Ship ‘N’ Shred your boxes. It will cost about $30 for a 30-pound box of paper, or $45 for a 60-pound box.

You can choose to have your boxes picked up and shipped, or drop them off at a shipping location yourself.

5. Hard Drive Shredding

The FACTA disposal rule also applies to electronic information. If you have old hard drives or other data storage devices that contain consumer information covered by FACTA, it’s important to make sure they are properly destroyed.

Just like with hard copies, shredding a hard drive is the best way to ensure that any sensitive information cannot be read or reconstructed.

Many paper shredding services will handle hard drive shredding for between $4 and $12 per hard drive. But the more hard drives you have, the less it will cost per drive.

Whichever method you choose, make sure you ask about a certificate of destruction. These certificates detail the when and where of your document shredding and can serve as proof that you complied with FACTA and other laws.

Need FACTA-Compliant Shredding?

Shred Nations partners with secure shredding services across the United States. To get started finding the right provider, fill out the form on the right or give us a call at (800) 747-3365 for a free, no-obligation quote from shredding services in your area.