Compliance Alert

FACTA GAINS ATTENTION

U.S. newspaper reports are beginning to examine the effects of the FACTA law, including the mandatory secure storage and destruction of records set to take effect June 1, 2005.

A December 2004 article in the Albany, N.Y., Times Union predicts, quotes two Albany area information destruction company managers on their views on FACTA’s potential impact. Guilderland, N.Y., Proshred franchisee Ned Berkowitz tells the paper, "The [shredding] industry itself, it’s not in its infancy, but it has a lot of room to grow."

Berkowitz also tells the Times Union reporter that his client list has increased steadily since opening his franchise in 2002 and that he recently upgraded to a larger mobile shredding truck.

David Neville, founder of 3N Document Destruction Inc. in Clifton Park, N.Y., says his business has grown steadily in the 10 years since he founded it, though he says the number of companies he is competing with has also grown.

The article notes that while part of FACTA addresses the obligations of credit bureaus, the secure storage and destruction mandates apply to "a range of businesses using customers’ confidential financial information," with the goals of protecting privacy and deterring fraud and identity theft.

Although civil legal obligations may have certainly made it wise to do so, many business owners and managers previously had not been legally obligated to shred documents with customer contact and financial information. But the FACTA laws (depending on how they are interpreted) may mean that property managers, car dealers, retailers and other types of companies will have to ensure that they destroy their own records or hire an outside company to confidentially shred the documents.

Along with paper records management and destruction, the same guidelines will apply to information that is stored electronically.