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Why Shred? - Legally Speaking

Federal Privacy Act

This Act was created to insure that government agencies protect the privacy of individuals and businesses with regard to information held by them and to held these agencies responsible if any information is released without permission.


FACTA

The Fair and Accurate Credit Transaction Act (FACTA) is intended primarily to help consumers fight the growing crime of identity theft. Accuracy, privacy, limits on information sharing, and new consumer rights to disclosure are included in FACTA.

The practice known as “dumpster diving” provides identity thieves with a treasure trove of personal data. Irresponsible information disposal by businesses has been cited in numerous instances of fraud. Now under FACTA provisions, consumer reporting agencies and any business that uses a consumer report must adopt procedures for proper document disposal.

The FTC, the federal banking agencies, and the National Credit Union Administration (NCUA) have published final regulations to implement the new FACTA Disposal Rule. The FTC's disposal rule applies to consumer reporting agencies as well as individuals and any sized business that uses consumer reports. The FTC lists the following as among those that must comply with the rule:

   » Inventory lists
   » Lenders
   » Insurers
   » Employers
   » Landlords
   » Government agencies
   » Mortgage brokers
   » Automobile dealers
   » Attorneys and private investigators
   » Debt collectors
   » Individuals who obtain a credit report on prospective nannies, contractors, or tenants
   » Entities that maintain information in consumer reports as part of their role as service providers to
      other


The Supreme Court

The United States Supreme Court has stated that information in your trashcan is “fair game” to anyone that may come across it. Privacy laws make you helpless to law suits when personnel records are given to outsiders – even by accident.



Income Taxes

It’s getting harder to keep others from minding your business. According to credit reporting companies, identity thieves defrauded more than 500,000 people in 1997, up from 12,000 in 1992. The unsuspecting may be especially vulnerable at tax time, when sensitive documents are discarded in mass quantities.


Legal & regulatory violations caused by not destroying info before discarding




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