Reasons to Shred
The following information does not constitute legal advice or legal opinion. Always seek legal counsel when you have doubts or questions regarding any legal matter.
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Identity theft is a serious crime that occurs when your personal information is stolen and used without your knowledge, especially to commit fraud or other crimes. Unfortunately, this type of crime can cost the victim both time and money, in addition to destroying the victim's credit and ruining their good name. Most ID theft crimes are committed using information stolen from a single improperly handled document containing personal information. Properly shredding your sensitive documents is an essential step in preventing identity theft.
Identity thieves use a variety of methods to steal your personal information, including:
Dumpster Diving — They rummage through trash looking for bills or other paper with your personal information on it.
Skimming — Thieves steal credit/debit card numbers by using a special storage device when processing your card.
Phishing — They pretend to be financial institutions, companies, or government agencies, and send email or pop-up messages to try to get you to reveal your personal information.
Hacking — Thieves hack into your email or other online accounts to access your personal information, or into a company's database to access its records.
Stealing — They steal wallets and purses, mail including bank and credit card statements, pre-approved credit offers, new checks, and tax info. Thieves also steal personnel records from their employers, or bribe employees who have access to sensitive information.
The Health Insurance Portability and Accountability Act (HIPAA)
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a United States federal law that requires health care organizations to "maintain reasonable and appropriate technical and physical safeguards to prevent intentional or unintentional use or disclosure of protected health information." Protected health information includes patient logs, insurance, billing, patient medical records, and other personally identifiable health information. For additional information:
Fair And Accurate Credit Transactions Act (FACTA)
Beginning June 1, 2005, a new federal rule requires businesses and individuals to take appropriate measures to dispose of sensitive information derived from consumer reports. Any business or individual who uses a consumer report for a business purpose is subject to the requirements of the Disposal Rule, a part of the Fair and Accurate Credit Transactions Act of 2003 (FACTA), which calls for the proper disposal of information in consumer reports and records to protect against “unauthorized access to or use of the information.”
The Rule applies to people and both large and small organizations that use consumer reports, including: consumer reporting companies; lenders; insurers; employers; landlords; government agencies; mortgage brokers, car dealers; attorneys; private investigators; debt collectors; individuals who pull consumer reports on prospective home employees, such as nannies or contractors; and entities that maintain information in consumer reports as part of their role as a service provider to other organizations covered by the Rule.
The Disposal Rule applies to consumer reports or information derived from consumer reports. The Fair Credit Reporting Act defines the term consumer report to include information obtained from a consumer reporting company that is used – or expected to be used – in establishing a consumer’s eligibility for credit, employment, or insurance, among other purposes. Examples of consumer reports include credit reports, credit scores, reports businesses or individuals receive with information relating to employment background, check writing history, insurance claims, residential or tenant history, or medical history.
The Rule requires disposal practices that are reasonable and appropriate to prevent the unauthorized access to – or use of – information in a consumer report. For example, reasonable measures for disposing of consumer report information could include establishing and complying with policies to: burn, pulverize, or shred papers containing consumer report information so that the information cannot be read or reconstructed; destroy or erase electronic files or media containing consumer report information so that the information cannot be read or reconstructed; or conduct due diligence and hire a document destruction contractor to dispose of material specifically identified as consumer report information consistent with the Rule. Due diligence could include: reviewing an independent audit of a disposal company’s operations and/or its compliance with the Rule; obtaining information about the disposal company from several references; requiring that the disposal company be certified by a recognized trade association; or reviewing and evaluating the disposal company’s information security policies or procedures.
Financial institutions that are subject to both the Disposal Rule and the Gramm-Leach-Bliley (GLB) Safeguards Rule, which requires institutions to take steps to protect sensitive customer information, should incorporate practices dealing with the proper disposal of consumer information into the information security program that the Safeguards Rule requires. Information is available at http://www.ftc.gov/privacy/
Gramm-Leach-Bliley (GLB) Act
The Financial Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act, protects the privacy of consumer information held by financial institutions and requires companies to give consumers privacy notices that explain the institutions' information sharing practices. In addition, the act provides consumers with the right to limit some sharing of their information.
The GLB Act applies to almost any business that is involved in providing financial products or services to consumers. "Financial Institutions" includes but not limited to:
• Check Cashing Businesses
| • ATM Operators
• Mortgage Brokers
• Insurance Companies
|• Real Estate Brokers
• Property Appraisers
• Tax Preparation Businesses
For additional information: http://www.ftc.gov/privacy
Sarbanes-Oxley (SOX) Act
In light of a series of high profile accounting scandals in the United States, the SOX Act of 2002 was put in to law as way of enhancing corporate responsibility and financial reporting, as well as combating corporate and accounting fraud. SOX is administered by the U.S. Securities and Exchange Commission (SEC), the organization responsible for protecting investors and maintaining the integrity of US financial markets.
SOX applies to public companies in the United States, as well as those based in other countries that are traded on US stock exchanges such as the New York Stock Exchange and NASDAQ. SOX also affects interrelated businesses and industries, including the accounting, legal, and records/information management industry, which works with companies on financial and corporate reporting. Find out more at the Identity Theft Clearinghouse.