NFIB

Don't Toss Your Confidential Files
02/ 20/ 2003

by Jeffrey Moses

I recently watched the movie The Rainmaker, in which Danny Devito plays a seedy lawyer who at one point searches for records of an insurance company's foul deeds in a dumpster behind the company's headquarters. He emerges with a thick stack of computer printouts that eventually force the insurance company into bankruptcy.

Real life could play out the same way for companies that toss records instead of making them unreadable, because numerous federal and state regulations mandate the thorough destruction of confidential information. According to the 1974 Federal Privacy Act, disclosure of personnel files and other types of confidential information, even by accident, could be grounds for a damaging lawsuit.

There are a number of ways to destroy documents: shredding, burning, burying or recycling. The majority of businesses both small and large choose shredding because of its efficiency and low cost. Many small businesses can adequately destroy their obsolete records by purchasing a shredder and shredding on their own premises.

For companies that generate large volumes of confidential materials (insurance companies and agencies, health care organizations, franchise headquarters, etc.), contract-shredding services can either shred on site using specially designed trucks or haul documents and shred at the service's facility. Look under "Paper Shredders" in the Yellow Pages. Compare prices, confidentiality and professionalism of services. Many of the more established shredding services are members of the National Association for Information Destruction (NAID). Visit the NAID Web site at www.naidonline.org/certified_members.html to locate reputable shredders near you.

When destroying confidential information of all types, four important elements of proof should be obtained from a shredding service:

1. Date and time of destruction
2. Place of destruction
3. Means of destruction
4. The name of the person performing the destruction (verified by signature).

This documentation should be provided by the shredding service in the form of a written "Certificate of Destruction." If you use your own shredder, record these four important elements each time you destroy documents.

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