Work Stacks Up For Shredders

Businesses might soon be burning out the motors on their office shredders, with new federal guidelines coming down the pike intended to keep customers' confidential data unread by the wrong people.

A year ago, President Bush signed into law the Fair and Accurate Credit Transaction Act, known as FACT. In addition to requiring that credit bureaus issue free credit reports to consumers, part of the law mandates that a range of businesses using customers' confidential financial information secure those records and shred paper copies when they're done.

The goal is to deter fraud and identity theft, and to protect privacy.

The new disposal rules, which go into effect June 1, could force businesses from car dealers to landlords to buy shredders, or to hire an outside company to destroy the documents for them.

"There's just so much paper out there," said David Neville, who started 3N Document Destruction Inc. in Clifton Park with his brother and father 10 years ago. Business has grown steadily since then, he said.

So have the number of competitors in the field.

Ned Berkowitz, who opened a Guilderland office of the Canadian shredding business Proshred about a year and a half ago, said his client list also has increased steadily. Berkowitz already has bought a second massive, $200,000 shredder-equipped truck to replace a smaller one he started his business with.

"The industry itself, it's not in its infancy, but it has a lot of room to grow," he said.

It's not that doctors' offices, banks or lawyers are putting more confidential data on pulp.

But more and more regulations are passed that dictate how the records must be stored and destroyed. The Health Insurance Portability and Accountability Act of 1996, known as HIPAA, came with new rules that phased in by 2003 for health care professionals to protect patients' data.

And a host of provisions in the Gramm-Leach-Bliley Act of 1999 require financial institutions to lock down or destroy customers' sensitive records.

Shredding companies say simple office machines can't tear through and destroy documents as quickly and efficiently as their high-tech machines. And they say hiring an outside firm is cheaper than paying a staff member to feed three or five sheets at a time into the office shredder.

But new regulations or not, many businesses say they don't have any changes to make.

"It has not given us a higher standard for document retention and destruction," said Michael Castellana, president of the State Employees Federal Credit Union in Albany, which contracts with a company that carts away sensitive documents for destruction. "We have always held a very high standard of care for our members' information. We already have policies and procedures in place."

Janice A. Potter, a former Albany landlord and current board member of the Capital District Association of Rental Property Owners, said landlords typically keep tenants' information locked down as well.

"I just think now they have it in writing and we've been doing it all along," she said. Albany Times Union