The Legal Aspects of Document Shredding

November 13, 2020

Certain legislation can affect business operations, which can make it difficult to educate oneself and stay current with any legislative changes.  In relation to your business documents, there is one very critical piece of legislation you should know details on; this one major piece of legislation known as FACTA.

FACTA is short for the Fact and Accurate Transactions Act. This law was established and implemented with the aim of stopping and punishing consumer fraud/identity theft practices. The act is made up of seven key titles:

  1. Identity Theft Prevention and Credit History Restoration
  2. Improvements in Use of and Consumer Access to Credit Information
  3. Enhancing the Accuracy of Consumer Report Information
  4. Limiting the Use and Sharing of Medical Information in the Financial System
  5. Financial Literacy and Education Improvement
  6. Protecting Employee Misconduct Investigations
  7. Relation to State Laws.

On June 1 2005 the FTC (Federal Trade Commission) added a new component to FACTA known as the “Disposal Rule”, which was originally designed in an effort to motivate both businesses and individuals (including those in the Dallas region), to take appropriate measures when disposing of confidential records derived from consumer reports, in an effort to stop identity theft and consumer fraud. In essence; it requires businesses and individuals using consumer reports, to securely destroy them when their appropriate retention period has passed.

The FTC explains what document disposal procedures are acceptable. These refer to burning, pulverizing, or shredding papers containing consumer report information. Electronic data must also be considered and should be properly destroyed by physical destruction of the media devices used to store the files (ex. hard drives, USB flash drives etc.).

The Disposal Rule pertains to a variety of organizations, covering many industry professions. These include:

  • Consumer reporting companies
  • Lenders
  • Insurers
  • Employers
  • Landlords
  • Government agencies
  • Mortgage brokers
  • Automobile dealers
  • Attorneys or private investigators
  • Debt collectors
  • Individuals who obtain a credit report on prospective nannies, contractors, or tenants

National Records Centers is proud to offer services that are compliant with what is stated under federal and state-level legislations including FACTA. Our approach to shredding ensures that our operations follow strict industry standards that are directly linked to legal compliances.  Your Dallas business can trust in the document management services provided by NRC.

To find out more, get in touch with us at 877-672-6584