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Identity theft, new law about to send shredding on a tear
You've heard about shredding. You understand that it's probably
a good idea to shred any receipts that have your credit card numbers
or other personal information on them to stop identity theft. But now there's a law with a provision going into effect this
summer that says if you employ even one person a nanny, a yard
man and you have their personal information because you're doing
the right thing and paying Social Security taxes, you have to "destroy"
the information before you throw it away. You have to shred it or burn it or pulverize it.
Or you could get sued. Or fined. Or become part of a class-action
lawsuit by enraged nannies whose personal information has somehow
gotten out.
Shredders are going to become "a household requirement as
much as a washer and dryer," says Bob Johnson, executive director
of the National Association for Information Destruction (NAID),
a paper-shredding industry trade group. That's because one provision of the Fair and Accurate Credit
Transactions Act (FACTA) the law that also says you get one free
look at your credit report each year will mean an exploding industry
will get bigger. "The reality is: People are afraid of their mail,"
says Tony Lammers, president of InnoDesk of Beachwood, Ohio. "They do really strange things to get rid of mail,"
he says. "They fire up the barbecue and burn it. They use the
fireplace. Or they tear up their mail in little bits and pieces
and run around the house putting a little bit in this trash can
and a little bit in that trash can so that it won't all go out in
the same garbage bag."
The fastest-growing crime
They have good reason: Identity theft is the fastest-growing
crime in the USA, according to the National Crime Prevention Council.
About 7 million people had their identities stolen in the year ended
July 2003, according to two studies done by Gartner Research and
Harris Interactive. Each will spend an average of $1,495 and 600 hours getting his
or her finances straightened out, according to the Identity Theft
Resource Center. And that's not counting lawyers' fees.
The Fair and Accurate Credit Transactions Act was passed in December
2003, but rules were written just recently on the disposal provision.
The law requires the destruction "shredding or burning"
or "smashing or wiping" of all paper or computer disks
containing personal information "derived from a consumer report"
before it is discarded. That means that if you do a credit check on your nanny before
you hire her or you get private information from a nanny service
that came originally from a credit report you fall under the rules.
The disposal provision goes into effect June 1. By then, all
businesses whether employing one worker or 1 million will have
to join the shredding game.
If you don't shred and information gets out, there are penalties,
according to NAID:
Civil liability. An employee could be entitled to recover actual
damages sustained if his or her identity is stolen as a result of
your inaction. Or you could have to pay statutory damages of up
to $1,000 per employee.
Colleen Vulin had her identity stolen about five years ago after making
an online purchase. And a hotel employee once used her credit card
number to buy items from a catalog. Since then, she and her husband, Chris, of St. Louis have been
sensitive about destroying all their personal information. They
have two, "maybe three," personal shredders, she says.
"It's really my husband who's shredder-friendly," she
says. "I'll be in bed, and all of the sudden in the middle
of the night I'll hear the hum of the shredder going."
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