FACTA (Fair and Accurate Credit Transactions Act) is an amendment to the Fair Credit Reporting Act that was added to protect consumers from fraud and identity theft.
FACTA was passed in 2003 and is designed to reduce the risk of consumer fraud and identity theft with the use of “reasonable disposal methods.”
The FACTA Disposal Rule was added in 2005 and “requires disposal practices that are reasonable and appropriate to prevent the unauthorized access to, or use of, information in a consumer report.”
As FTC.gov goes on, “measures for disposing of information include policies to shred, burn, or pulverize consumer information so that it can’t be read or reconstructed.”
Read this transcript or watch the video below to learn about the FACTA Disposal and how you can stay compliant.
Where FACTA Applies
FACTA applies to almost all businesses and individuals in the United States, requiring that anyone who maintains or possesses any form of consumer information for a business purpose must properly dispose of it to prevent unauthorized access or use.
What Information Is Affected By FACTA?
The FACTA Disposal Rule applies to all consumer reports containing records of personally identifiable information (PII) or financial information. All of the following is considered PII:
- Date of birth
- Phone number
- Social security number
- Driver’s license number
- Credit card numbers
- Credit reports/score
- Employment background
- Check writing history
- Residence history
- Insurance claims
- Medical history
FACTA Noncompliance Fines
|Violation Type||Violation Penalty|
|Federal Enforcements||Up to $2,500 per violation|
|State Enforcements||Up to $1,000 per violation|
|Civil Liabilities||Up to $1,000 and full recovery from all statutory damages for each customer affected|
|Class Action Lawsuits||Up to $1,000 for each customer affected—meaning up to $1,000,000 for 1,000 customers—plus courthouse decisions|
How to Ensure FACTA Compliance
Given its time and cost-efficiency, shredding is one of the most common methods for properly destroying all consumer report information and ensuring your compliance with the FACTA Disposal Rule. One way to make sure you are compliant is to create a compliance checklist.
- Do you have policies and procedures in place for how records should be maintained and shredded?
- Is document shredding covered in your company handbook?
- Does your business offer regular training on document shredding for all personnel?
- Do you also have a disposal plan for electronics like CDs, computers, hard drives, floppy disks, etc.?
Top Shredding Options
Mobile services bring the shredding to you. Typically costing $130-$175 for 1-10 boxes, a mobile shredding truck can be scheduled to come and shred on site.
Off-site services bring a truck to you, but instead of shredding on site they take your documents to an off-site facility. Off-site is often cheaper than mobile, making it better as projects get bigger.
Drop Off Shredding
Drop off shredding is ideal for small shredding projects. You can walk into a nearby UPS or other packing and shipping store, and rather than paying a flat rate, you pay by the pound—on average only $1.
Ship ‘N’ Shred Services
Ship ‘n’ Shred is similar to a small-scale mobile service. Instead of taking boxes in like drop off shredding, providers come to you to pick up your materials. Typically, Ship ‘n’ Shred runs around $32 per box.
Hard Drive Shredding
The FACTA Disposal Rule also applies to electronic PII and other sensitive information, meaning it’s important to make sure old hard drives and other data storage devices are properly destroyed as well.
On average, hard drive destruction costs between $4–$12 per hard drive, however, the more you have to shred, the less it will typically cost per drive.
Certificates of Destruction
Once shredding is complete, you’re typically given a formal certificate of destruction that outlines the process and provides proof of compliance with FACTA and other laws like HIPAA and the GLBA.
Certificates of destruction provide details including chain of custody as well as the date, location, and names of witnesses to the shredding.
Looking for FACTA-Compliant Shredding?
Join Apple, Amazon, and other companies Shred Nations has helped find secure shredding services. To let us help you get started staying FACTA compliant, fill out our form or give us a call at (800) 747-3365 for a free no-obligation quote from shredding services in your area.