When your personal information gets into the wrong hands, it can turn into identity theft and consumer fraud. Any financial institutions you do business with have some of your personal information and it is their job to keep it safe. If your personal information is kept on paper or on a hard drive, your financial institution needs to ensure its safety when they no longer need it. Here are two types of stored personal information your financial institutions need to shred before they throw it away.
The Fair and Accurate Credit Transactions Act (FACTA) came into effect on June 1, 2005 to prevent and penalize consumer fraud and identity theft. Any financial institution that has your information on file needs to destroy it before they dispose of it. This includes any personal information stored on a hard drive or other electronic memory. So, when your bank's loan department upgrades their computers, they will need to physically destroy the old hard drives.
Unfortunately, simply erasing the memory of a computer's hard drive does not safely rid the computer of any personal information that has been stored on it. Someone who knows how to retrieve erased information can get all your personal and financial information that was once stored on the computer's hard drive. When they have your personal information, they can sell it to thieves on the black market, or use it for their own illegal activities.
Banks want to avoid compromising your personal information that they have stored on their hard drives. They want to take care of their customer's information and they don't want to pay FACTA fines. To resolve this they have their hard drives physically shredded.
An industrial shredder grinds up the hard drives with sharp metal teeth, tearing everything into pieces 1/2 inch and smaller. This destroys any information that was once stored on the hard drives, then the materials can later be recycled.
Fair and Accurate Credit Transactions Act does not only apply to electronically stored data, it also covers physical documents. A financial institution must shred any paper forms, loan applications, and other documents containing your personal information. Many financial companies will require that their employees shred all papers that they discard so that nothing leaves the office fully intact.
Most financial banks and other businesses hire a shredding company that will take care of the on site document shredding. This includes shredding for all their paper documents, just as they shred the hard drives of their computers. This will ensure the highest security of your personal information.
Several types of personal information include your address, social security number, driver's license number, email address, and phone number. With this information on a paper document, a thief could apply for credit and other loans in your name. Then, when the thief does not pay back these loans, it can ruin your credit and cost you time and money to repair the situation. Identity theft of this type can affect you for years as you attempt to get your credit back in good standing and repair the mess that identity thieves have made of your financial history.
If your bank does not follow the FACTA regulations, they can get fined up to $2500 for every consumer record compromised. A computer's hard drive, or an entire stack of paper loan applications, can contain a lot of personal information that can be used illegally. This can cost a financial institution a great deal of money in fines if they are not careful to destroy by shredding every document and hard drive full of personal information. If you're concerned about your personal information, contact you bank and make sure they work with a company like STS Electronic Recycling to make sure all important information is appropriately destroyed and disposed of.