Get Ready, Get Set, Start Shredding

If fears of identity theft haven't sent you to the nearest office supply store to buy a shredder, a new law may be just the push you need.

A law that goes into effect June 1 says that you must “destroy” personal information — shred it, burn it or pulverize it — of all people you employ, even if it's just one person and it's the gardener, USA Today reported. If you have an employee's Social Security number for tax reporting purposes, or credit check information, a shredder may be a worthwhile investment to comply with the Fair and Accurate Credit Transactions Act.

The law says that consumers can get a free credit report every year. It also contains the document destruction provision, which has sparked high expectations for big sales among those in the paper-shredding industry.

"The reality is: People are afraid of their mail," Tony Lammers, president of InnoDesk of Beachwood, Ohio, told USA Today.

"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."

Statistics show people have good reason to be careful. The National Crime Prevention Council says identity theft is the fastest-growing crime in the U.S., with 7 million victims in 2003. And contrary to popular belief, identities are most often stolen not through the Internet, but low-tech methods like capitalizing on a lost wallet or checkbook, the Wall Street Journal reported.

Getting personal information online amounted to 11.6 percent of identity theft cases in 2004, while 68.2 percent of cases of identity fraud were committed with information obtained offline, according to "The 2005 Identity Fraud Survey Report," released Wednesday by the Better Business Bureau and consulting firm Javelin Strategy & Research.

Small businesses may feel the biggest impact from the document-destruction provision of the law. "A lot of companies that did not comply in the past were the medium- and smaller-sized companies,” said Bob Johnson, executive director of the National Association for Information Destruction (NAID), a paper-shredding industry trade group. “They were busy running their business or felt they were flying below the radar screen. But now they'll have to comply. Every employer is covered, even individuals."

Colleen Vulin of St. Louis, who was victimized by identity theft about five years ago, and her husband, Chris, have since made sure to destroy all their personal information.

"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." She laughs. "The next day, there will be little strips of paper all over the floor in the basement."

You may like these other stories...

School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...
Many senior US tax professionals believe that a streamlined audit process will be the top benefit resulting from the IRS Transfer Pricing Audit Roadmap, a new toolkit organized around a notional 24-month audit timeline,...
Tax accounting to be simplified for money-market fundsThe US Securities and Exchange Commission (SEC) voted 3-2 on Wednesday for sweeping changes to institutional money-market funds, Emily Chasan, senior editor of...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.